The ousting of Venezuelan president Nicolás Maduro was dramatic, but the market fallout was anything but.
Investors shrugged because, as Interactive Brokers’ Steve Sosnick noted, stock markets are much better at pricing factors that directly affect corporate revenues, earnings, or cash flows.
“Geopolitical events in countries already outside the global economic mainstream”, he said, “are not really in stock traders’ purview.” Venezuela was “big news, but not for markets”.
True, but more consequential issues may lie beyond the initial market response. Betting on Interactive Brokers’ prediction, markets now indicate a much higher chance that the US will attempt to take control of part of Greenland – a semi-autonomous territory of US Nato ally Denmark – by 2028, with odds jumping from 8 to 29 per cent. Similar spikes were seen in other prediction markets such as Polymarket and Kalshi.
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One could argue the future of Greenland is another market-neutral issue. However, recent events confirm an increasingly cavalier US approach to international law and a growing appetite for high-stakes interventions, with implications for the future of Nato, Ukraine, Taiwan and beyond.
Certainly, Donald Trump’s increased appetite for geopolitical risk struck Robert Armstrong, the FT columnist who coined the Taco (Trump Always Chickens Out) acronym. Armstrong now questions whether this newfound boldness in foreign affairs could extend to economic policy, leaving markets to price in more volatility around tariffs, rates and other US policy decisions.
For now, markets shrug, but investors may think again if US assertiveness meets the economic sphere.
