Investors bet Washington’s move against Venezuela’s leadership would allow US firms access to the world’s largest oil reserves. President Donald Trump’s administration plans to meet with executives from US oil companies this week to discuss boosting Venezuelan production.
The S&P 500 energy index rose 2.7% to its highest since March 2025, with heavyweights Exxon Mobil and Chevron both surging.
Weapons manufacturers also advanced after Washington’s military action. Lockheed Martin and General Dynamics climbed, while the S&P 500 aerospace and defense index rose to a record high.
“Energy stocks are really benefiting from the expectation that President Trump is intending to send them in to do more investment in Venezuela and ultimately make more money for themselves,” said Rob Haworth, senior investment strategist at US Bank Wealth Management in Seattle.
“The lack of permanent boots on the ground, the fact that we’re not permanently engaged, means the broader equity markets are able to set aside what might have been fears of a prolonged engagement,” Haworth said.
Tesla climbed 3.1% after seven straight sessions of losses. Nvidia dipped 0.4% and Apple declined 1.4%.
The S&P 500 climbed 0.64% to end the session at 6,902.05 points.
The Nasdaq gained 0.69% to 23,395.82 points, while the Dow rose 1.23% to 48,977.18 points. Volume on US exchanges was heavy, with 19.1 billion shares traded, far exceeding the average of 15.9 billion shares over the previous 20 sessions.
The S&P 500 financials index jumped 2.2% as investors looked to upcoming quarterly reports. Analysts on average see S&P 500 financial companies growing their earnings 6.7% year-over-year in the December quarter.
Goldman Sachs and JPMorgan Chase rose more than 3% and hit record highs.
“The mood has been favoring financial stocks in recent days and as people look beyond tech, this is a sector many are choosing to look toward,” said Steve Sosnick, chief market analyst at Interactive Brokers.
Wall Street’s main indexes posted double-digit gains in 2025 for the third consecutive year, a run last seen in 2021.
Data showed US manufacturing contracted more than expected in December, extending a 10-month slump.
The spotlight will now be on the monthly nonfarm payrolls on Friday, which could influence the US Federal Reserve’s monetary policy in 2026.
Markets are pricing in about 60 basis points of interest rate easing this year, according to LSEG.
Cryptocurrency-linked shares advanced as bitcoin hit a more than three-week high. Strategy, formerly MicroStrategy, climbed almost 5% and Coinbase rallied 7.8%. Goldman Sachs upgraded Coinbase to “buy” from “neutral”.
Advancing issues outnumbered falling ones within the S&P 500 by a 2.1-to-one ratio.
The S&P 500 posted 60 new highs and 11 new lows; the Nasdaq recorded 107 new highs and 49 new lows.