Minimal impact on broad equity markets
On 3 January 2026, the US military captured Venezuela President Nicolás Maduro and flew him to the US where he faced charges for narcoterrorism. US President Donald Trump said the US “will run the country until such time as we can do a safe, proper, and judicious transition.” While the forceful removal of a foreign head of government has sparked condemnation and global unease, equity markets reacted calmly. The S&P 500 closed 0.67% higher on Monday compared to last Friday’s close and is up 0.93% as of 8 January 2026. Investors appear to be more concerned about factors such as developments in AI, the US labour market, and monetary policy, rather than the ousting of President Maduro.
This is not entirely surprising, given that geopolitical events have historically had limited impact on markets in most cases. For instance, when the US bombed three Iranian nuclear facilities on 22 June 2025 during the Iran-Israel conflict, the S&P 500 rose 0.96% the following day. Similarly, the S&P 500 gained 2.2% despite Russia’s invasion of Ukraine on 24 February 2022.
"Liberation Day” was a rare exception, as the S&P 500 fell 4.8% in a single day following President Trump’s announcement of reciprocal tariffs on global trading partners. This was because tariffs directly affect corporate earnings, whereas most geopolitical crises typically do not have a direct or lasting impact on company profits.
Looking ahead, we believe that the Venezuela situation will have little broad-based significance to equities but may continue to impact share prices of certain industries such as oil and defence.
Geopolitical developments in Venezuela offer uncertain upside for oil stocks
US oil companies surged on Monday, after Trump said that US oil companies will “go in, spend billions of dollars, fix the badly broken infrastructure–the oil infrastructure–and start making money for the country.”
Chevron, currently the only US oil major operating in Venezuela, could benefit from securing a licence to expand its operations. ExxonMobil and ConocoPhillips may also stand to recover billions of dollars in assets that were seized by the Venezuelan government following the nationalisation of the oil industry in 2007. Oilfield service providers such as Halliburton and Schlumberger could benefit from contracts to rehabilitate Venezuela’s oil infrastructure.
That said, significant political uncertainty remains surrounding Venezuela’s future leadership and the extent to which it would cooperate with US demands. Given the lack of stable governance, legal risks, and the high cost of rebuilding Venezuela’s oil infrastructure, oil majors may be reluctant to undertake large-scale investments in the country. Moreover, a sustained recovery in Venezuela’s oil output could add to the existing global supply glut over time, putting downward pressure on oil prices and ultimately weighing on sector profitability. As such, we believe investors should be cautious about betting heavily on oil stocks based solely on Venezuela-related developments.
Defence stocks also posted strong gains on Monday, driven by heightened investor expectations that the US might increase military involvement following the capture of Maduro. Although significant escalation appears unlikely in the near term, especially after the US Senate moved to block additional military action, the episode has nonetheless highlighted the strategic importance of increased defence spending and autonomy. Renewed discussions in Washington regarding the potential acquisition of Greenland, including remarks that the military “is always an option”, have further heightened geopolitical risk concerns. Overall, global defence spending is likely to continue rising, providing a durable tailwind for the sector.
Table 1: Oil and defence stocks rallied after the US captured President Nicolás Maduro
|
One-day %
change after US intervention in Venezuela (in local currency terms)
|
|
Defence
|
|
Lockheed
Martin
|
2.92%
|
|
Northrop
Grumman
|
4.38%
|
|
Rheinmetall
|
9.21%
|
|
Leonardo
|
6.25%
|
|
Oil
|
|
Chevron
|
5.10%
|
|
Exxon Mobil
|
2.21%
|
|
Halliburton
|
7.84%
|
|
Schlumberger
|
8.96%
|
|
Source:
Bloomberg Finance L.P., iFAST Compilations.
Data as of 6
January 2026
|
Stay calm and stay invested
As with most geopolitical crisis, the political situation in Venezuela is unlikely to have a lasting impact on equities as a whole. Investors should stick to their investment strategy and not let political uncertainty keep them out of the markets.
To navigate 2026 with greater confidence, we invite you to read our
market outlook, where we outline key themes, risks, and opportunities shaping the year ahead.