On Monday, S&P futures exhibited an upward trend despite the U.S. military action in Venezuela and the apprehension of leader Nicolas Maduro. Crude oil prices remained relatively stable, as investors speculated that this development would not escalate into larger geopolitical tensions that could disrupt market stability. Energy stocks spearheaded the initial advances based on the expectation that these companies would capitalize on the reconstruction of Venezuela’s oil infrastructure. Gold and bitcoin prices experienced an increase.
S&P 500 futures increased by 0.3%, buoyed by gains in stocks such as Chevron, which contributed positively to market sentiment. Nasdaq-100 futures advanced 0.6% as investors continued to purchase chip stocks such as AMD. Futures for the Dow Jones Industrial Average experienced a decline of 16 points. Chevron experienced a notable increase of 7%, emerging as the primary beneficiary due to its established operations in Venezuela, a country recognized for possessing the largest proven oil reserves globally. Exxon Mobil experienced an increase of 4.2%. Shares of oilfield services companies that could assist in the reconstruction of Venezuela’s energy sector, such as Halliburton and SLB, experienced a 9% increase each. The State Street Energy Select Sector ETF experienced a notable increase of 4.7% in the premarket.
In the aftermath of the assault and subsequent apprehension by U.S. forces, Maduro along with his spouse, Cilia Flores, was transported to New York, where they faced charges related to a conspiracy of narco-terrorism and additional offenses. The indictment states that drug trafficking “has enriched and entrenched Venezuela’s political and military elite.” President Donald Trump stated during a news conference on Saturday that the U.S. would “run” Venezuela “until such time as we can do a safe, proper and judicious transition. This is a significant geopolitical event though unlikely to be a major near-term market-mover,” stated Matthew Aks. “Currently, investors must maneuver through a landscape characterized by Trump’s seemingly intentional ambiguity regarding his forthcoming actions.” Our instinct suggests that Trump typically does not favor extensive military interventions aimed at regime change, akin to the Iraq and Afghanistan conflicts he has frequently condemned. However, Trump’s statements today suggest that this may not be a singular event akin to the Iran nuclear strike last year,” Aks added.
Defense giants General Dynamics and Lockheed Martin advanced around 1% each, as Trump’s latest action indicates that rapid military strikes will play a crucial role in his strategy for addressing emerging geopolitical challenges. Despite the optimistic response in equities, traders simultaneously mitigated risk by increasing their exposure to gold. Futures contracts associated with the precious metal experienced a notable increase of 2.4%. Bitcoin has once again surpassed the $93,000 mark. Market has concluded a session characterized by mixed results. On Friday, the inaugural trading day of the year, both the S&P 500 and Dow experienced gains, whereas the Nasdaq concluded slightly below the neutral mark. This week, market participants will be attentive to the forthcoming release of the December jobs report scheduled for Friday. According to a survey, economists anticipate that the economy added 54,000 jobs in the previous month.