Investors, traders and speculators welcomed President Donald Trump's reassertion of American authority in the western hemisphere with a rally that lifted all three main U.S. equity indexes into or near all-time high territory. The so-called "Donroe Doctrine" means the White House will "run" Venezuela's oil and gas industry, and the energy sector reacted well to the president's pronouncement.
Financials and consumer discretionary stocks were up big, too, but relative weakness for technology-related names suggests questions about the AI revolution will linger in the new year.
Chevron (CVX, +5.1%) was No. 1 among the 30 Dow Jones stocks on Monday after the U.S. government executed an operation to remove President Nicolás Maduro from power in Venezuela over the weekend. According to the Energy Information Administration, Venezuela has the world's largest store of proven crude oil reserves, approximately 303 billion barrels, or about 17% of the global total. Its natural gas reserves rank it 34th in the world.
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But Venezuela's oil production is low, accounting for about 0.8% of global output in 2023, due to lack of investment. Its reserves are mostly "heavy" crude, which requires a high degree of expertise and a lot of capital.
The market seems to be pricing in the probability that neither economic sanctions nor Maduro's regime will hinder flows of any kind. Goldman Sachs (GS, +3.8%) joined Chevron at the top of the Dow, and JPMorgan Chase (JPM, +2.7%) posted a substantial gain, as financial stocks reflected the broader risk-on mood.
Nvidia (NVDA, -0.4%), the leader of an AI revolution under scrutiny amid rising hyperscaler capex budgets and concerns about returns on those investments, was down ahead of CEO Jensen Huang's presentation at the Consumer Electronics Show (CES) in Las Vegas at 4 pm Eastern Standard Time. Tech stocks were broadly lower too.
"The Venezuelan story is dominating the news," observes Louis Navellier of Navellier & Associates, "but clearly, the market does not see this as a major risk. 2026 is off to a very good start, and the momentum is clearly positive."
Indeed, as Navellier adds, sectors not participating in today's rally, in addition to technology, include "conservative" utility stocks, health care and consumer staples stocks.
At Monday's closing bell, the Dow Jones Industrial Average was up 1.2% at 48,977, a new all-time closing high for the blue-chip index. The broad-based S&P 500 had added 0.6% to 6,902, but fell short of turning the "Santa Claus Rally" indicator positive. The Nasdaq Composite was up 0.7% to 23,395, as the tech-heavy index ended a five-session losing streak on strength in other sectors.
Picking 'Donroe Doctrine' Winners
Chevron was only the biggest of the energy stocks making big moves on Monday in the aftermath of President Trump's weekend. Fellow U.S.-based "supermajor" Exxon Mobil (XOM, +2.2%) surged to a new 52-week high, and ConocoPhillips (COP, +2.6%), the world's biggest independent exploration and production outfit, also rallied.
"Assuming the recent events eventually lead to higher oil supply and exports from Venezuela," Morgan Stanley Research analysts Devin McDermott and Joe Laetsch write, "we would expect some benefits for coastal US refiners (better access to heavy crudes) and headwinds for oil producers (especially Canadian oil sands)." The analysts do see "relative tailwinds" for some majors and E&Ps.
They note as well that Chevron has maintained a presence in Venezuela and is best-positioned to ramp up production, while Exxon Mobil and ConocoPhillips have unpaid arbitration awards for asset expropriation by Maduro's government. "President Trump has made several comments that he aims to see U.S. energy companies invest in Venezuela oil production and, where relevant, receive restitution for assets that were nationalized," they add.
At the same time, McDermott and Laetsch conclude, "Facilitating meaningful new investment probably takes more than just an easing of sanctions." That includes a viable path to recouping outstanding payments and arbitration awards and confidence in the stability of a new government as well as comfort with financial terms. And all that "might take time."
The analysts rate all three of Chevron, Exxon Mobil and ConocoPhillips Overweight, the equivalent of "Buy." Their 12-month target price for CVX is $180, or 9.8% upside based on CVX's closing price on Monday. Their target for XOM is $137, or 9.3% above its most recent close. For COP, it's $117, 17.9% higher from here.
According to McDermott and Laetsch, refiners Valero (VLO, +9.3%), Phillips 66 (PSX, +7.2%), HF Sinclair (DINO, +5.3%) and PBF Energy (PBF, +3.4%) could also see tailwinds.
Is the ISM Manufacturing PMI still reliable?
Even as the economy as measured by GDP continues to expand at a notable pace, the Institute for Supply Management Manufacturing Purchasing Managers Index (PMI) declined for a 10th straight month in December and printed at 47.9 in December to finish at its lowest level for 2025.
Analysts expected to see 48.4 after a 48.2 reading in November. "Tariffs continued to be all over the data," Wells Fargo economists Shannon Grein and Tim Quinlan write, "and while other industrial data suggest demand may be broadening out, we remain cautious of the recovery ahead."
Noting third-quarter GDP growth of 4.3% and that both equipment and intellectual property spending growth topped 5%, Grein and Quinlan question whether the ISM index – "an indicator once prized by economists and policymakers for its helpfulness in identifying cyclical turning points" – is losing its luster.
"It may be that the concentrated nature of growth in this cycle (favoring all things tech and AI at the expense of other categories) might be making a liar out of the ISM index in terms of aggregate growth," the economists write. "But as a measure of the breadth of expansion or the number of companies that are flourishing, the ISM retains its status as a reliable gauge."
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