Wall Street Cheers U.S. Intervention in Venezuela

Quick overview

Markets do not believe that U.S. military intervention in Venezuela will affect oil prices in the short term. However, enthusiasm is growing among oil companies with ties to the South American country.

In the first trading session following the arrest of Venezuelan President Nicolás Maduro, major Wall Street indexes posted strong gains, alongside advances in oil and precious metals. Among the energy companies that surged were several with both ongoing operations and outstanding legal disputes involving Venezuela. Elsewhere, European markets recorded broad gains, while Asian markets also closed higher, with increases of up to 4% in some exchanges.

Against this backdrop, the S&P 500—an index tracking the largest companies listed on the New York Stock Exchange—rose 0.64%. The Nasdaq Composite, which is heavily weighted toward technology stocks, gained 0.69%, while the Dow Jones Industrial Average climbed 1.23%.

Still, analysts at Schwab stressed that “U.S. intervention in Venezuela is more of a geopolitical event than a market event.” They added that “while the situation in Venezuela remains fluid and will undoubtedly continue to evolve, global markets have so far absorbed the news calmly.”

On this point, they emphasized that going forward, “much will depend on the degree of U.S. involvement in Venezuela, how major oil producers outside both countries respond, and whether the energy market faces a broader disruption.”

Market winners

The stocks posting the largest gains during the session were linked to infrastructure construction, refining, and other services within the hydrocarbons sector. SLB NV (+10.22%), Valero Energy (+9.23%), and Halliburton (+7.78%) led the rally. They were followed by Exxon Mobil (+2.60%), Chevron (+5.74%), ConocoPhillips (+2.59%), Marathon Petroleum (+5.94%), and Builders FirstSource (+3.64%).

Chevron, which remained active in Venezuela after the expropriation of foreign oil assets in the early 2000s, is now considered “the best-positioned among the global oil majors to benefit from greater U.S. access to the world’s largest crude reserves.” ConocoPhillips is seeking more than $8 billion from Venezuela, while Exxon still has nearly $1 billion outstanding from expropriation claims, according to rulings by international arbitration courts.

Gains in metals and oil

Strong gains were also observed across the commodities sector. Brent crude, the global benchmark used in much of the world—including Argentina—rose 1.58% to $61.79 per barrel. Meanwhile, WTI crude, the U.S. benchmark, climbed 1.8% to $58.35 per barrel.

In this context, the short-term implications for the market really depend on the type of power transition that takes place in Venezuela. Clearly, a prolonged and disorderly transition increases the risk of short-term supply disruptions.

For now, Vice President Delcy Rodríguez has assumed power. While her initial rhetoric was defiant, it appears to be shifting, with statements calling for cooperation between Venezuela and the United States.

This scenario “increases the likelihood that the United States could lift its blockade on sanctioned tankers entering and leaving Venezuela, which would open the door to a short-term decline in prices.”

Metals recorded even stronger gains. Gold rose 3.01% to $4,449.04 per ounce, silver surged 7.73% to $76.50, platinum climbed 7.07% to $2,288, palladium gained 4.79% to $1,772.50, and copper jumped more than 5% to $5.99.

ABOUT THE AUTHOR See More

Ignacio Teson

Economist and Financial Analyst

Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.

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