The Dow Jones Industrial Average skyrocketed Monday — briefly crossing the 49,000 mark to hit an all-time high — after the weekend’s US military strike on Venezuela and capture of dictator Nicolás Maduro.
Investors celebrated the raid, betting that it would give the US access to Venezuela’s rich oil reserves – though some analysts warned sanctions could make it difficult to ramp up oil exports.
The Dow jumped nearly 600 points, or 1.2%, to close slightly below 49,000 after hitting a new intraday high of 49,209 earlier in the session, while the S&P 500 and Nasdaq rose 0.6% and 0.7%, respectively.
Shares in Chevron, the only major US oil company currently operating in Venezuela, jumped nearly 8%.
ConocoPhillips and Exxon Mobil – both of which left Venezuela nearly 20 years ago when Maduro’s socialist predecessor, Hugo Chávez, nationalized their assets – rose 2.6% and 2.3%, respectively.
Defense stocks also led the rally as the capture of Maduro and his wife – who both pleaded not guilty in Manhattan federal court on Monday to charges including narco-terrorism conspiracy – raised concerns around heightened geopolitical tensions.
Shares in Lockheed Martin and General Dynamics rose 2.9% and 3.5%, respectively. The S&P 500 aerospace and defense index climbed 1.5% after hitting a record high earlier in the day.
Investor optimism largely came from President Trump’s remarks signaling major US oil companies will be able to tap into Venezuela’s rich oil reserves.
“We’re going to run the country until such time as we can do a safe, proper and judicious transition” to new leadership, Trump said during a Saturday press conference.
He also announced that Venezuela’s Vice President Delcy Rodríguez was sworn in as interim president after Maduro’s arrest – warning that if she does not cooperate, she will face a situation “probably worse” than Maduro.
“We’re going to have our very large United States oil companies, the biggest anywhere in the world, go in, spend billions of dollars, fix the badly broken infrastructure, the oil infrastructure, and start making money for the country,” Trump said.
He said it wouldn’t cost the US anything to “run” Venezuela, since “The money coming out of the ground is very substantial.”
Tech stocks like Tesla rose 3.1%, while Nvidia fell 0.4%. Cryptocurrency-linked stocks like Coinbase and Strategy, formerly known as MicroStrategy, climbed 7.8% and 4.8%, respectively.
Goldman Sachs jumped 3.7%, while JPMorgan Chase rose 2.6%.
Brent crude oil rose about 1.3% by Monday afternoon, trading around $61 a barrel, after swinging overnight Sunday.
Though Trump vowed US drillers would be closely involved in rebuilding Venezuela’s oil infrastructure, oil markets were initially muted as energy traders braced for challenges in ramping up oil experts – particularly sanctions put in place to pressure Maduro’s regime.
Even if sanctions are eased, analysts have warned it could take years to significantly increase global exports of Venezuelan oil.
Gold futures rose about 2.9% on Monday to $4,457.90 as investors flocked to safe-haven assets. Silver futures also rallied about 7.5% to over $75.
Investors often buy gold as a hedge against inflation and economic uncertainty due to its capacity to hold value even as other assets fall.
Last month, gold marked its best annual performance last year since 1979 – soaring more than 60% and notching an all-time high of $4,549.71.
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