In a stunning display of “markets over geopolitics,” US equity indexes surged to new records on Monday, largely brushing off the dramatic US military strike that captured Venezuelan President Nicolas Maduro.
While President Trump declared temporary American control over the nation and threatened further action in Colombia and Mexico, Wall Street focused on the potential unlocking of the world’s largest oil reserves.
📊 THE MARKET SCORECARD:
1️⃣ Equities (Risk-On):
- Dow Jones: +1.24% (Closing at 48,982.9 – A new record).
- S&P 500 Energy Index: Jumped >2%, driving the broader index up 0.66%.
- The Sentiment: Wealthspire Advisors notes that markets are ignoring the political drama because “Venezuela’s GDP has virtually no impact on global GDP,” making this an isolated event for everyone except energy traders.
2️⃣ Commodities (The Real Action):
- Oil: Prices climbed as traders assessed Trump’s ultimatum to “open up” Venezuela’s oil industry. Brent (+1.43% to $61.62) and WTI (+1.57% to $58.22) both moved higher.
- Gold (Safe Haven): While stocks partied, fear found a home in bullion. Spot gold jumped 2.7% to $4,447/oz, nearing its all-time high as investors hedged against broader regional instability.
3️⃣ The Macro Focus: Beyond the headlines, traders are locking in on this week’s economic data dump (ISM Manufacturing & Non-Farm Payrolls), signaling that Fed policy remains a bigger driver of asset prices than Latin American regime change.
💡 ANALYST TAKEAWAY: The divergence between Stocks (Record Highs) and Gold (+2.7%) suggests a complex narrative. Equity investors are pricing in a medium-term energy bonanza (cheap Venezuelan oil hitting the market), while commodity investors are hedging against the immediate chaos of a US military occupation.
👇 Energy Strategists: Trump wants to “open up” Venezuela’s oil industry immediately—how long before we realistically see those barrels hit the global market?