US stock futures experienced an uptick on Monday as market participants reacted to the recent US military operation in Venezuela, which resulted in the capture of President Nicolás Maduro. The developments not only captivated investors but also fueled a revival of optimism surrounding demand for artificial intelligence (AI) technologies.
Contracts on the S&P 500 increased by 0.3%, while the tech-heavy Nasdaq 100 saw an increase of 0.7%. In contrast, Dow Jones Industrial Average futures traded largely flat as investors processed a mixed conclusion to Friday’s trading session.
The US’s military action in Venezuela was a focal point as the market entered the first full trading week of the new year. However, many strategists appeared to downplay potential long-term economic consequences, viewing the heightened interest in AI as a more significant driving force behind market gains. Recent positive news from Nvidia suppliers further invigorated the appetite for tech investments.
Former President Trump remarked over the weekend that the US intends to “run” Venezuela “until such time as we can do a safe, proper and judicious transition.” This statement was echoed by Secretary of State Marco Rubio, who emphasized that the US possesses “a tremendous amount of leverage” in this situation but refrained from committing to direct governance of the nation.
Despite concerns, Venezuela’s current oil production stands at less than 1 million barrels per day, comprising less than 1% of global supply. As such, analysts believe the potential impact on energy markets remains limited. Consequently, futures for US benchmark West Texas Intermediate crude and international benchmark Brent crude both fell by 0.4%.
In other market dynamics, gold prices surged alongside a strengthening dollar as investors considered the geopolitical risks presented by the ongoing situation in Venezuela. The benchmark 10-year Treasury yield witnessed a decline of two basis points, settling at 4.17%, as US bonds aimed for their first gain in a week.
Notably, shares of Taiwan Semiconductor Manufacturing Company (TSMC) saw a significant rally after Goldman Sachs increased its price target for the contract chipmaker, forecasting robust growth for another year. Foxconn, Nvidia’s principal server maker and Apple’s leading iPhone assembler, reported record revenue for the fourth quarter driven by elevated demand for AI products. This surge in the tech sector sets the stage for the upcoming CES technology show in Las Vegas, commencing on Tuesday.
As the week progresses, investors also anticipate a return to a more regular flow of economic data, with the crucial jobs report slated for release on Friday. Economists surveyed by Dow Jones forecast a payroll growth of roughly 55,000 for December.
In the realm of market movers, QXO Inc. experienced a premarket rise of over 4% after news emerged that Apollo Global Management would invest more than $1 billion into the distribution firm. Additionally, the dollar index reached its highest level since mid-December, reflecting traders’ assessments of the geopolitical landscape following the capture of Maduro.
Energy stocks rallied as expectations surged after Trump’s commitment to “run” Venezuela, with shares of Chevron, ConocoPhillips, and Exxon Mobil climbing in early trading. The broader implications of the US military action also influenced the Mexican peso, contributing to a cautious atmosphere in currency trading.
The international financial landscape experienced additional shifts as Bitcoin climbed to a three-week high following Maduro’s arrest, enhanced by rising investor sentiment amid political uncertainty. This ripple effect also saw Palantir Technologies and Strategy stocks rise, buoyed by the defense sector and cryptocurrency performance, respectively, while Comcast faced a concerning drop amidst plans to spin off its legacy NBCUniversal assets.
In summary, the intersection of geopolitical developments in Venezuela and the sustained excitement around AI technology set the stage for a dynamically evolving market environment as investors navigate uncertainty.
