The United States assaulted Venezuela, and President Donald Trump threatens to seize Greenland by “forceful means.” Simultaneously, the U.S. has uncertain financial prospects and a weak employment report.
However, the Dow Jones Industrial Average index might still hit a record 50,000 points on Monday.
The Dow, comprising major firms considered market representatives, typically mirrors broader American sentiment. When tensions are high or people are downcast, the Dow index generally declines; when individuals project a more upbeat tune, the Dow index rises.
Americans are currently facing a sharp political divide: unrest in Venezuela, protests against ICE following the fatal shooting of a Minneapolis mother, an economy concluding 2025 with faint job figures, and intentions to “do something about Greenland, whether they like it or not.”
This should suggest the Dow index is struggling, rather than nearing a record high. So why does this contradict history?
Economic Impact — Loud Headlines
Wall Street is more concerned with the financial consequences of Trump’s political maneuvers, for instance, whether the disturbances in Venezuela could disrupt the oil supply.
Yet, Trump has suggested the U.S. should invest in Venezuelan oil infrastructure, potentially utilizing the nation’s oil—which, per the U.S. Energy Information Administration, constitutes around one-fifth of global reserves.
This could boost defense spending, but not enough to alarm the market, noted Jay Hatfield, CEO of Infrastructure Capital Advisors.
“It’s crucial to focus on the stock market’s economic drivers and acknowledge that political and international issues are just that, unless they become extreme,” he stated.
No formal agreements have been reached yet, Energy Secretary Chris Wright informed CNN’s Kristen Holmes, but following Friday’s meeting between administration officials and executives, there was “enormous interest” from major oil corporations.
Unlocking the oil flow will bolster the economy, observed Hatfield, which appears more encouraging for investors.
The index continued gaining ground throughout the week as tensions in America shifted inward. On Friday, the Dow advanced another 237 points.
Several reasons exist for optimism: Trump ordered his “representatives” to purchase $200 billion in mortgage-backed securities to lower housing costs, investors eagerly await AI deployment, and there have been no mass layoffs, said Hatfield.
Gloomy Consumers Are Still Shopping
The latest University of Michigan consumer survey indicated sentiment improved in January for the second straight month, reaching a preliminary reading of 54, up from December’s 52.9. Most people were surveyed before Nicolás Maduro’s takeover.
Americans hold a harsher view of Trump’s economy due to worries about soaring product and service costs. But this isn’t reflected in consumer spending, which keeps supporting the economy.
For instance, U.S. Black Friday retail sales increased by 4.1% year-over-year, according to Mastercard SpendingPulse data.
This is largely due to a K-shaped economy, where affluent Americans keep spending, their wallets sustained by a strong stock market, wage growth, and rising property values. Meanwhile, lower-income households are curtailing expenditure due to a slowing job market, high debt, and inflation.
“They are a bit circumspect about jobs not being created, but not being lost either,” remarked Paul Christopher, head of global investment strategy at the Wells Fargo Investment Institute. And strong employment growth is anticipated this year, he added.
Optimism Regarding Rate Cuts
Investors remain hopeful about the Federal Reserve cutting interest rates following three successive reductions in 2025, noted Hatfield.
However, the coming weeks might see more turbulence due to earnings season and the December Bureau of Labor Statistics report on the Consumer Price Index, according to Christopher.
A jobs report showing no hiring and no firing gives the Fed the green light to lower rates, he pointed out.
“Markets look past other political aspects and will concentrate on what we believe will be a fairly strong economy in 2026. So, whether we hit the Dow (50,000) on Monday, Tuesday, or Wednesday, we will look at the broader picture,” Christopher concluded.
About the Author
