On Monday morning, Ed Yardeni, chairman of Yardeni Research, wrote in a note to clients that he was adding Venezuela to “our list of unsettling developments” that could factor into a shaky start to 2026.
By late morning, Yardeni – like others – had watched the stock market largely follow the weekend’s developments that saw the US capture and arrest Venezuela’s Nicolas Maduro.
“The positive reaction to the stock is fascinating,” Yardeni wrote. “This suggests markets are not particularly concerned. Markets seem to be focusing on positive outcomes – peace through strength. Perhaps that’s what markets are rooting for.”
Wall Street is still assessing the fallout from the U.S. invasion of Venezuela. But at least to begin with, investors are looking past the focus on the themes that will dominate markets throughout 2025 — and even earlier — by returning to AI trade rally mode and focusing on the Federal Reserve and corporate earnings.
Asked how the current climate affects his holdings, Gabelli Funds portfolio manager John Belton Holdings didn’t say much.
“I think why the market is the way it is, quote, put it off — this situation — at least that’s what we know today,” he told Yahoo Finance. “Not a big impact on company fundamentals … not a big part of the global economy. I think it’s pretty straightforward.”
Ben Emmons, founder and CIO of FedWatch Advisors, suggested that investors may be treating this moment as a “risk-on” event.
“2026 began as a geopolitical year, which could act as a risk-on catalyst in later periods,” Emmons wrote in a note to clients. “It reminds me of 2016, when Brexit and Trump’s first election led to significant rallies in commodities, emerging markets and domestic equities.”
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Not everyone is convinced that the market reaction will remain calm. Peter Chir of Academy Securities said the biggest risk could come from China, the biggest buyer of Venezuela’s oil.
Venezuela has the world’s largest proven oil reserves, but decades of mismanagement, underinvestment and US sanctions have reduced its output to less than 1% of global supply.
“So far, the administration has only talked about reparations and returning oil rights to US companies. Expect those actions to be fought in court, as China will have to defend its own interests or suffer not only financial loss, but face loss,” Tichir wrote to clients.
