U.S. Operation in Venezuela and Global Market Responses: January 2026 Overview

U.S. forces conducted an operation in Venezuela over the weekend preceding January 3, 2026, leading to the capture and transport of Venezuelan President Nicolas Maduro and his wife, Cilia Flores, to New York City to face drug-trafficking charges. This development, alongside various U.S. policy announcements and economic data releases, prompted diverse reactions across global financial markets, including gains in U.S., European, and Asia-Pacific equities, fluctuations in oil prices, and notable movements in technology, energy, and defense sectors.

U.S. Operation in Venezuela

Venezuelan President Nicolas Maduro and his wife, Cilia Flores, were captured during a U.S. operation in Venezuela on Saturday, which was the weekend before January 3, 2026. Following their capture, they were transported to the Westside Heliport in New York City. U.S. authorities confirmed that both face charges, including narco-terrorism conspiracy. An indictment alleges that drug trafficking activities had enriched and solidified Venezuela's political and military leadership.

During a news conference on Saturday, U.S. President Donald Trump stated that the U.S. would "run" Venezuela "until such time as we can do a safe, proper and judicious transition." However, on Sunday, U.S. Secretary of State Marco Rubio clarified that Washington would leverage its influence to achieve policy objectives, without directly stating that the U.S. would govern Venezuela.

Venezuela, a founding member of OPEC, holds the world's largest proven crude oil reserves, estimated at 303 billion barrels, accounting for approximately 17% of the global total. Its current oil production is less than 1 million barrels per day.

Global Market Reactions

Global financial and oil markets reacted to these developments. Asia-Pacific markets began the first full trading week of 2026 with gains, and European stock markets opened in positive territory on Monday. U.S. stock indexes displayed mixed performance, with periods of record highs and subsequent declines throughout the week.

• Asia-Pacific: Japan's Nikkei 225 index increased by 2.82%, and the Topix index rose by 1.42% to a new record high. South Korea's Kospi index climbed 2.41% to a record high of 4,420.92. Australia's ASX/S&P 200 index recorded a modest gain of 0.11%, while mainland China's CSI 300 index increased by 0.68%. Hong Kong's Hang Seng Index remained flat.
• Europe: On Monday, the U.K.'s FTSE index was up 0.5%, France's CAC 40 increased by 0.5%, Germany's DAX rose almost 0.6%, and Italy's FTSE MIB was up 0.7%.

U.S. stock indexes concluded Tuesday's trading session with increases. The Dow Jones Industrial Average advanced by 237 points (0.5%), the S&P 500 index gained 0.2%, and the Nasdaq Composite rose by 0.1%. Earlier in the week, the S&P 500 and Dow Jones Industrial Average reached new record levels. By Wednesday, January 7, 2026, both the S&P 500 and Dow Jones Industrial Average retreated from these highs, while the Nasdaq Composite recorded gains.

Sectoral Performance

Technology and artificial intelligence (AI) related stocks contributed to the market's upward trend early in the week. Amazon and Nvidia shares increased by over 2% and 0.4% respectively. Micron Technology advanced exceeding 5% early in the week and 3% on Thursday, while Palantir Technologies climbed approximately 2%. Semiconductor stocks, including Taiwan Semiconductor (up 6% on Thursday), showed notable performance. Microsoft shares were down over 1% on Tuesday. Reports cited that Chinese customs authorities advised agents that Nvidia's H200 chips are not allowed to enter the country.

The energy sector experienced gains on Monday, with the S&P 500 energy sector recording its most significant one-day rise since July. Shares of Chevron rose by 6%, and Exxon Mobil advanced over 2%. Oilfield services companies Halliburton and SLB each gained 7%. The State Street Energy Select Sector ETF (XLE) increased by 4% in premarket trading. However, on Wednesday, financial and energy sectors experienced declines exceeding 1%, with Exxon Mobil, Chevron, and ConocoPhillips shares seeing declines. Conversely, oil refiners Valero Energy and Marathon Petroleum gained 3% and over 1% respectively, following reports that oil sales from Venezuela would continue indefinitely and sanctions against the country would be reduced.

President Trump encouraged increased investments from U.S. oil companies in the region, stating they could invest in Venezuela to "fix the badly broken infrastructure, the oil infrastructure, and start making money for the country." Elliott Investment Management's $6 billion bid to acquire Citgo Petroleum, a subsidiary of Venezuela's state oil company, had been approved by a U.S. judge and awaited U.S. Treasury Department approval.

Defense sector stocks experienced significant gains globally. In Japan, Kawasaki Heavy Industries saw a 5.7% rise, and Mitsubishi Heavy Industries advanced by 6.4%. In Europe, Rheinmetall was up 6.8%, Leonardo rose 6.2%, Hensoldt AG traded 5.2% higher, and Renk gained almost 4.5%. Overall, the Stoxx Europe Aerospace and Defense Index increased by more than 2.5%. U.S. defense contractors General Dynamics and Lockheed Martin also saw their shares rise, with General Dynamics reaching an all-time high, and Boeing and RTX Corp. increasing. However, defense company shares declined later in the week after President Trump stated he would not permit them to issue dividends or stock buybacks until his complaints about the industry were addressed.

The financial sector saw declines later in the week. JPMorgan's stock dipped 3% on Tuesday despite reporting better-than-expected fourth-quarter results, with investment banking fees decreasing and not meeting expectations. Other financial stocks, including Goldman Sachs (down 1%), Mastercard (down 4%), and Visa (down 4%), also saw declines. On Wednesday, Wells Fargo shares declined over 1% following lower-than-expected revenue, and Bank of America and Citigroup were scheduled to release quarterly earnings. Analysts raised questions regarding the executive branch's authority to implement changes such as a proposed cap on credit card interest rates without Congressional involvement.

Commodity Markets

• Oil Prices: Oil prices experienced an initial decline as global markets assessed geopolitical developments, with Brent crude initially falling by over 1% before recovering slightly to settle 0.25% lower, and West Texas Intermediate (WTI) crude prices decreasing by 0.4%. Prices then increased on Monday as investors assessed the potential impact of Maduro's removal on oil shipments. However, crude oil prices later decreased, extending losses, after President Trump indicated that interim authorities in Venezuela would transfer up to 50 million barrels of oil to the U.S., leading to expectations of increased oil supply. Oil prices later increased after President Trump canceled all meetings with Iran and stated that any country conducting business with Iran would face a 25% tariff on all U.S. business.
• Gold Prices: Spot gold advanced by more than 1%, reaching $4,383.99. Futures contracts for gold increased by more than 2%, and prices rose during the week.
• Silver Prices: Silver prices reached a new record high.
• Copper Prices: Copper prices also increased.
• Bitcoin: Bitcoin traded above $92,000.

Economic Data and Monetary Policy Outlook

Market participants anticipated the release of the December jobs report, which later indicated a somewhat weaker, yet stable, labor market. The December consumer price index (CPI) was released on Tuesday; core CPI, excluding food and energy, rose 0.2% monthly and 2.6% annually, falling below economists' estimates. The monthly figure for headline inflation increased 0.3% in December, leading to an annual rate of 2.7%, matching forecasts. Fed funds futures are pricing in two quarter-point interest rate cuts for the year, beginning in June.

Other U.S. Policy Statements and Geopolitical Developments

President Trump made several policy-related statements during the week:

• He proposed a one-year 10% cap on credit card interest rates.
• He announced a ban on large institutional investors from purchasing more single-family homes, which coincided with declines in private equity stocks such as Blackstone and Apollo Global Management.
• He stated that Microsoft would announce changes to prevent rising utility costs from its datacenter buildout efforts.
• He signed a proclamation implementing a 25% tariff on specific semiconductors, excluding chips imported to contribute to the buildout of the U.S. technology supply chain.
• He reportedly considered intervention options in Iran and issued a warning to Cuba that Venezuelan oil or money would cease flowing unless Cuban leaders reached an agreement with Washington.
• He indicated potential action regarding Greenland, asserting his intent to acquire the Danish territory for the U.S., leading to discussions with Danish and Greenlandic foreign ministers, with Denmark noting a fundamental disagreement over ownership.
• He criticized Federal Reserve Chair Jerome Powell on Tuesday, labeling him as either "incompetent" or "crooked."