[New York Stock Exchange] Dow Hits Record High Despite Venezuela Airstrike... Safe-Haven Assets Like Gold and Treasuries Also Surge

Investor Sentiment Remains Firm Despite Arrest of President Maduro and His Wife
Energy Stocks Surge on Hopes for Venezuela Oil Infrastructure Reconstruction
International Oil Prices Rise; Safe-Haven Assets Also Strengthen
Focus on December

On January 5 (local time), all three major U.S. stock indexes closed higher. Although geopolitical tensions intensified following a surprise U.S. attack on Venezuela and the arrest of anti-American President Nicolas Maduro over the weekend, investors judged that the situation was unlikely to deteriorate into a full-blown crisis. However, caution regarding uncertainty persisted, leading to simultaneous increases in the prices of safe-haven assets such as U.S. Treasury bonds and gold. International oil prices also surged by nearly 2%.

A trader is working on the floor of the New York Stock Exchange (NYSE) in the United States. Photo by Reuters Yonhap News Agency

On this day at the New York Stock Exchange, the blue-chip Dow Jones Industrial Average jumped 594.79 points (1.23%) to close at 48,977.18, setting a new all-time high. The S&P 500, which focuses on large-cap stocks, rose 43.58 points (0.64%) to 6,902.05, while the tech-heavy Nasdaq gained 160.193 points (0.69%) to finish at 23,395.822.

By sector, energy stocks soared, fueled by expectations of benefiting from Venezuela's oil infrastructure reconstruction. Chevron, which operates in Venezuela, home to the world's largest oil reserves, jumped 5.1%. ExxonMobil also rose 2.21%. Oilfield service companies Halliburton and Schlumberger surged 7.84% and 8.96%, respectively. Defense industry stocks were also strong, with General Dynamics up 3.54% and Lockheed Martin rising 2.92%.

Previously, on January 3, President Maduro and his wife Cilia Flores were arrested in a U.S. military raid and transported to New York, where they were indicted on charges including narco-terrorism. According to the indictment, they are accused of conspiring with drug cartels to smuggle thousands of tons of cocaine into the United States. At a press conference on January 3, U.S. President Donald Trump stated, "We will administer Venezuela until a safe, appropriate, and wise transfer of power becomes possible."

Sam Stovall, Chief Investment Strategist at CFRA Research, analyzed, "In the short term, oil prices could spike due to uncertainty in supply and transportation." However, he added, "Since Venezuela accounts for only 1% of global oil supply and conditions have worsened in recent years, this could lead to positive outcomes in the long run." He also noted, "Venezuela needs infrastructure improvements, and the United States can support this effort."

However, there were also warnings that geopolitical instability could become a burden for the stock market going forward. Thomas Mathews, Head of Asia-Pacific Markets at Capital Economics, commented, "While the U.S. military's arrest of President Maduro made headlines, financial markets have remained relatively stable." He added, "Nevertheless, the geopolitical impact could be significant and may increase the risk premium for certain regional assets."

Investors are closely monitoring the direction of the Venezuela situation, while also focusing on employment data to be released this week. The U.S. Bureau of Labor Statistics (BLS), under the Department of Labor, will release the December 2025 employment report on January 9. The market expects nonfarm payrolls to have increased by 57,000 last month, down from 64,000 in November. The unemployment rate is projected to fall by 0.1 percentage point to 4.5% over the same period. Prior to that, on January 7, the Department of Labor's November Job Openings and Labor Turnover Survey (JOLTs) and the December employment report from private labor market analytics firm ADP will be released. On January 8, the weekly initial jobless claims will be announced.

Additionally, remarks from Federal Reserve officials will continue. Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, said in a CNBC interview that the current benchmark interest rate of 3.5% to 3.75% is "very close to neutral" and assessed that "monetary policy is not putting excessive downward pressure on the economy." He stated that any further rate cuts would be determined based on future economic indicators. In addition, statements from Thomas Barkin, President of the Richmond Fed, and Michelle Bowman, Vice Chair of the Fed, as well as other members of the Federal Open Market Committee (FOMC), are scheduled.

International oil prices rose as a result of President Maduro's arrest. West Texas Intermediate (WTI) crude rose $1 (1.74%) from the previous session to close at $58.32 per barrel, while Brent crude, the global oil price benchmark, gained $1.01 (1.66%) to settle at $61.76 per barrel.

Yields on government bonds fell as demand for safe-haven assets increased. The yield on the 10-year U.S. Treasury note, the global benchmark for bond yields, dropped by 4 basis points (1 bp = 0.01 percentage point) from the previous session to 4.15%. The yield on the 2-year U.S. Treasury note, which is sensitive to monetary policy, fell by 2 basis points to 3.45%.