Russian stocks trading in the U.S. and the ruble jumped after a report that President Donald Trump would not extend further economic sanctions on Russia, contradicting comments from U.S. Ambassador to the United Nations Nikki Haley.
The VanEck Vectors Russia ETF reversed earlier losses and jumped 1.6 percent, while the iShares MSCI Russia Capped ETF was up nearly 1 percent. The ruble rose 1.5 percent against the dollar.
Haley on Sunday had said new sanctions were coming to punish Russia for its support of Syrian President Bashar al-Assad's government over the use of chemical weapons.
But The Washington Post quoted unnamed sources saying that Trump met with his national security team Sunday and told them he was upset about sanctions being officially rolled out, saying he was not yet comfortable with them. The Post quoted administration officials saying that Trump would not likely approve any further sanctions, without another provocative action from Russia that could trigger them.
Russian stocks have been under serious pressure, and the ruble has fallen since the U.S. sanctioned Russian oligarchs and businesses for supporting Assad and also meddling in the U.S. election. Russian stocks are down about 12 percent since the April 6 announcement, and the ruble is down about 5 percent against the dollar in that period.
Peter Donisanu, global market analyst at Wells Fargo said the sanctions limit liquidity for the financial sector and could potentially strain the sector. He said he is neutral on the emerging European, Middle East and Africa region of which Russia is a part.
"There's more going on here than just a couple of tweets and really at this point, pay attention to the reaction more than what's being said," Donisanu said.
One reaction has been a steep jump of more than 20 percent in aluminum, after Russia's Rusal, the world's second largest aluminum producer, was caught up in the sanctions. Rusol produces about 6 percent of the world's aluminum.