The geopolitical implications of President Trump’s controversial weekend attack on Venezuela and the capture and extradition of its president, Nicolás Maduro, are still being digested by legal and security experts in the two days following the shocking announcement.
What is more certain is the immediate market reaction from a select number of publicly traded stocks that have the potential to be impacted by the military action.
Here’s how America’s top energy, defense, and tech stocks are moving on the first trading day after the U.S. intervened in the affairs of its South American neighbor.
America’s oil and energy stocks soar
Some of the most closely watched stocks today will be those of oil and energy giants traded on U.S. exchanges, particularly Chevron Corporation.
The Texas-based oil company is the only American energy giant with the biggest footprint in the region, notes CNBC, and thus the one primed to benefit the most from Trump’s stated desire to “start making money for the country.”
But Chevron isn’t the only one that stands to benefit.
In a Saturday press conference addressing America’s military intervention, Trump said, “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.”
While the president did not name any specific companies, based on premarket trading this morning, investors seem to think that the following oil and energy giants stand to benefit from the intervention:
- Chevron (NYSE: CVX): up 7.3%
- Exxon Mobil (NYSE: XOM): up 4.5%
- ConocoPhillips (NYSE: COP): up 7.3%
- Halliburton Company (NYSE: HAL): up 10.3%
One interesting thing to note: Two prominent oil companies that trade on the New York Stock Exchange are currently down slightly in premarket trading. Those companies are Shell (NYSE: SHEL), down 0.7%, and BP (NYSE: BP), down 0.7%.
Shell is a British-Dutch company and BP is a British company. Investors may believe that Trump is unlikely to allow foreign oil companies—even those of its allies—to profit from America’s intervention in Venezuela.
But investors are cautious about defense stocks
America’s military intervention in Venezuela suggests that under Trump’s second term, the U.S. may engage in a new expansionist hard power policy, directly using its military might to enforce changes around the globe.
Indeed, as noted by Reuters, Trump has already threatened another military operation against a southern neighbor—this time in Colombia.
While the moral and legal aspects of such action are debatable, it’s undeniable that an expansion of America’s military action is good for the bottom lines of the country’s most prominent defense companies.
However, investors so far seem to be taking a cautious approach to U.S. companies operating in the defense space, with many companies up only slightly in premarket trading on Monday:
- Lockheed Martin (NYSE: LMT): up 1%
- RTX (NYSE: RTX): up 0.7%
- Northrop Grumman (NYSE: NOC): up 1%
- General Dynamics (NYSE: GD): up 1%
- The Boeing Company (NYSE: BA): up 0.2%
Defense-adjacent tech stocks are also up
While many of America’s tech giants, including Google and Microsoft, have defense contracts, some smaller tech firms almost exclusively cater to the country’s military and security apparatus.
Such companies likewise stand to benefit from increased U.S. military operations. Yet as of the time of this writing, investors also seem to be taking a more cautious approach to these stocks, which include:
- Palantir Technologies (NASDAQ: PLTR): up 3.8%
- Honeywell International (NASDAQ: HON): up 0.2%
- L3Harris Technologies (NYSE: LHX): up 0.7%
