A new geopolitical conflict is unfolding. Yet, US stocks are… up at new record highs?
That’s the dynamic on display on Monday as investors digest the US’s raid on Venezuela and the capture of the nation’s president, Nicolás Maduro, over the weekend.
Despite the upheaval of its South American neighbor, US stocks, gold, and bitcoin were among risk assets that churned higher on Monday. As far as markets are concerned, the Venezuela situation seems to already be an afterthought.
The S&P 500 climbed 0.6%, while the Dow’s 1.3% jump notched a record closing high for the benchmark. Energy stocks led the way across both indexes.
Those moves seem counterintuitive, but they reflect a dynamic that markets have shown time and time again over the decades: investors simply don’t care that much about conflict abroad.
Stocks, for one, have a pattern of falling as geopolitical tensions rise, but rebounding once the conflict actually occurs. According to an analysis by Fundstrat Research, there are at least five instances where equities rallied after a major geopolitical event, such as the first Gulf War or when Hamas attacked Israel in 2023.
Fundstrat Research
“The old adage has long been to ‘sell the rumor, buy the invasion,'” Kent Fung, Fundstrat’s vice president of market intelligence, wrote in a note to clients on Monday.
Peter Berezin, the chief market strategist at BCA Research, said Monday’s rally showed investors are more focused on taking the weekend’s string of events in a “positive light.”
“You had a country that has been hostile to the US that has expropriated a lot of US investments, and now Trump has orchestrated a regime shift that could open the country up for new investment,” he told Business Insider.
The lack of a negative reaction in markets could also reflect how investors can’t yet price in a final outcome of the US-Venezuela conflict. The market also seems to be focused on other recent stock drivers, such as the rally broadening out to sectors beyond tech, Berezin said.
The market’s upward momentum is proving to be a tough force to stop. US equities notched another record-setting year in 2025, with the S&P 500 gaining 16% as investors remained laser-focused on the growth potential of AI, strong earnings, rate cuts, and a still-resilient US economy.
“Solid results almost across the board” last year have caused investor confidence to be “reasonably strong,” Nicholas Colas, the co-founder of DataTrek Research, wrote in a note on Monday.
“From a mechanical standpoint, the global macro backdrop looks essentially unchanged,” Karl Schamotta, the chief market strategist at Corpay, wrote in a note detailing how investors largely took the Venezuela situation “in stride.”
If anything, investors are more likely to care about the coming December jobs report, Schamotta added, which could influence the market’s expectations for interest rate cuts in 2026.