Markets embrace risk-on Mood amid geopolitical developmen

General market commentary

US equities moved higher on Monday, with major indices posting solid gains despite heightened geopolitical tensions surrounding Venezuela. The Dow Jones Industrial Average led the advance, rising 1.2%, while the S&P 500 gained 0.6% and the Nasdaq Composite added 0.7%. Performance was supported by strength in cyclical sectors such as energy, financials, industrials and materials, pointing to a continued risk-on bias among equity investors. Attention remained focused on portfolio reallocation at the start of 2026, expectations for Federal Reserve policy, and the outlook for corporate earnings.

Energy shares were among the strongest performers following news that the US would support rebuilding Venezuela’s oil infrastructure. Major oil and oil services companies recorded notable gains, with Chevron up more than 5% and SLB advancing over 9%, helping to lift the headline indices. More defensive areas of the market, including utilities, healthcare and consumer staples, lagged behind. Overall, equity markets appeared comfortable that the situation would remain contained, even as bonds and precious metals reflected a more cautious tone elsewhere.

Latest market and economic update

Most Asian markets rose on Tuesday, led by Japan, where the TOPIX hit a record high, boosted by technology and semiconductor shares. Renesas Electronics gained 3%, while Hong Kong and China advanced modestly. South Korea’s KOSPI slipped slightly ahead of Samsung’s earnings. Gains were supported by US market strength and optimism over AI-driven chip demand.

U.S. equity futures were largely flat overnight after Wall Street closed higher, led by energy gains following Venezuela’s political developments. S&P 500 futures stood at 6,943, Nasdaq 100 at 25,572.75, and Dow futures at 49,215. Investors remained focused on Chevron and other oil majors, with attention turning to Friday’s U.S. jobs report.

European equities closed sharply higher yesterday, with the Eurozone STOXX 50 up 1.3% and STOXX 600 rising 0.9%, both at record highs. Tech and manufacturing led gains, with ASML up nearly 7% and Infineon 4.5%. Defence firms Rheinmetall, Leonardo, and Thales surged 5–10%, while miners benefited from higher bullion prices despite Venezuelan political uncertainty.

The U.S. dollar fell for a second day in Asian trade, easing 0.2% to 98.216 as geopolitical jitters from Venezuela eased and dovish Fed comments lifted risk sentiment. The euro strengthened 0.1% to $1.1737, while the dollar weakened against the yen and Chinese yuan amid softer U.S. manufacturing data and rising expectations of policy easing.

Oil prices eased slightly in Asian trade on Tuesday after Monday’s volatile session, as markets digested the U.S. capture of Venezuelan President Maduro. Brent fell to $61.65 and WTI to $57.93, pressured by dollar strength, profit-taking, and lingering supply concerns. Any increase in Venezuelan output depends on a stable leadership transition and lifted sanctions.

Venezuelan bonds surged after the reported US seizure of President Maduro raised hopes of political change and a major debt restructuring. Defaulted bonds jumped sharply on expectations of renewed diplomacy and negotiations, though analysts warned any restructuring would be lengthy, legally complex and highly sensitive to oil recovery and political stability.

Equities on the move

The following companies experienced moves in their share price driven by analyst ratings, quarterly earnings, or other news:

Nvidia CEO Jensen Huang unveiled the Vera Rubin AI chips, promising fivefold performance gains for chatbots, and announced plans to test a Level 4 robotaxi service by 2027. The AI platform, featuring advanced storage and networking, is expected to be adopted by major firms, as Nvidia expands into autonomous vehicles, its second-largest growth area after AI.

At the Consumer Electronics Show in Las Vegas, AMD CEO Lisa Su unveiled the Ryzen AI 400 series and MI455 AI processors, highlighting a thousandfold performance boost. She also previewed the MI500 chip, due in 2027, aimed at AI data centres, including those of OpenAI, as AMD seeks to capitalise on growing artificial intelligence demand.

Novo Nordisk has launched a once-daily Wegovy weight-loss pill in the US, priced from $149 a month for cash buyers. Approved last month, it targets needle-averse patients, challenges Eli Lilly, broadens access via pharmacies and telehealth platforms, and aims to revive sales and investor confidence after recent profit warnings.

Under Armour shares rose 3.5% after hours as Fairfax Financial disclosed a 22.2% stake, acquiring 41.96 million Class A shares for investment purposes. Analysts view the company as a turnaround opportunity, citing potential for strong sales growth and a 25% five-year EPS CAGR, while Fairfax may adjust its position based on market conditions.

CFRA downgraded Netflix to Hold, lowering its 12-month target to $100 due to risks tied to its proposed Warner Bros. Discovery acquisition. The deal could significantly increase Netflix’s debt, face US and EU regulatory hurdles, and take up to two years to close. The company may need to divest assets like HBO Max to manage financing.

Melius Research downgraded Uber to Sell, citing rising competition and threats from autonomous vehicle entrants. Analyst Conor Cunningham warned that Uber’s valuation may underestimate potential disruptions, with growth moderation or expansions by Waymo and Tesla posing further challenges to its market position and future returns.

Bank of America upgraded Duolingo to Buy, citing its dual appeal as an educational and entertainment app. With high subscriber retention, strong monetisation, and expansion into casual learning games like chess and music, Duolingo targets a broader audience than traditional education apps. Despite a 70% share decline, it remains undervalued relative to growth.

Raymond James upgraded Estee Lauder to Strong Buy, citing improved U.S. market share, rebounding China sales, faster innovation, and cost savings under its Profit Recovery & Growth Plan. Shares rose 4% premarket. Fiscal 2026 marks the start of multi-year profit recovery, with operating margins forecast at 12% and strong earnings growth expected through 2028.

KeyBanc upgraded Enphase Energy to Sector Weight from Underweight, citing that risks from weaker growth and regulatory headwinds are now priced in. Shares, down 53% in 2025, appear inexpensive with no debt and solid cash flow. Near-term results may bottom out, while long-term growth depends on new products, markets, and business model adaptation.

Upcoming data and events

Tuesday features key inflation updates from France and Germany, offering insight into eurozone price pressures. In the US, focus turns to logistics activity, services and composite PMIs, a Fed Barkin speech, retail sales trends via Redbook data, and API crude oil inventory figures.

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