Stock market unmoved by risks from Iran, Greenland and Venezuela

For the first two weeks of 2026, President Donald Trump’s administration detained Venezuela’s president, threatened to counter Iran’s violent crackdown on protests, and mooted the possibility of using force to seize Greenland. So why are stock prices rising?

The headlines triggered price movements in the following asset classes: gold, silver and oil Traders sought safe haven as they weighed the impact of US intervention in the Middle East on oil supplies.

However, the stock market seems to be ignoring this news. of S&P500 Since the market began the new trading year, there have been only three down sessions, and as of Thursday’s close it was up about 1.5% year-to-date. Europe, Latin America and the Middle East, where tensions are occurring closer to home, are also rising, and stocks in the Asia-Pacific region are also rising.

Despite the news, Wall Street’s three major stock averages are rising, seemingly ignoring the president’s apparent willingness to order military operations overseas and threaten to seize territory by force from close allies.

In addition to the S&P 500 index’s rise, Wall Street’s other two major stock averages are also rising this year. Dow Jones Industrial Average Increased by nearly 3% while technology is heavily used Nasdaq Composite It has increased by 1.2%.

Eric Friedman, chief investment officer at Chicago-based Northern Trust Wealth Management, which manages $492.6 billion in assets, said markets were unmoved by President Trump’s actions and comments on Iran, Venezuela and Greenland, in part because other economic and military powers did not react.

“The market is viewing these events individually, and each flare-up will likely require a unique response to further destabilize the market,” he told CNBC in an email. “I don’t want to speculate on what the next course of action might be, but what concerns me beyond the human situation in particular regions is whether lines will be drawn that affect trade in an increasingly segregated world.”

A U.S. Supreme Court ruling is expected soon on the legality of President Trump’s tariffs, but in the meantime, global investors appear to be adjusting to the White House’s 2025 policy change, Friedman said.

He added: “If the situation escalates further beyond what has happened to date, countries could face the threat of reassessed trade relations or sanctions, but until that happens, markets will remain in a more reactive mode to events as they occur and there is no need to adjust portfolio positioning now in anticipation of an event.” “If the market leans towards normative positioning and the idea that defensive measures are appropriate as the likelihood of a flare-up increases, we are likely to see a weaker US dollar.”

of us dollar indexwhich measures the dollar against a basket of major rivals, has risen about 1% since the beginning of the year.

Alex Morris, CEO of Washington-based F/m Investments, described the reaction from stock market investors as “so-so for the stock market.”

“Geopolitics is smoldering, but not boiling over,” he said. “While the president uses highly targeted displays of force, there is little operational time and personnel in the theater, so the market has little reaction.

“Short-lived and final events (no continued commitment) leave little room for markets to react. Once the news happens, that’s it. Also, the lack of meaningful response from Iran and Venezuela also played a role.”

Morris argued that the market’s lackluster response was driven by a “growing backlash” to Trump’s comments and actions.

“Despite substantial action, there is little the president is willing to backtrack on quickly, and many local actions on flooding have been canceled or reversed,” he said. “The market has learned to temper its enthusiasm and wait for receipt.”

Anthony Esposito, founder and CEO of Ascalon VI Capital, said the market hasn’t discounted geopolitical risks for some time.

“Israel bombed Iran. The S&P 500 fell 1% overnight, closing at just 50 bps. The United States bombed Iran. There was almost no reaction,” he told CNBC.

Energy production, rare earth sourcing, national security and infrastructure expansion are all at play, he said. “Venezuela and Greenland could be seen as positive for markets and even US GDP, (but) that doesn’t take into account what-ifs.”

“Iran is the wild card,” he added, noting that markets fell earlier this week “until the concerns are resolved” as President Trump appeared to back down from military action. “If something happens in Iran, the market will react (higher oil, lower stocks, higher gold), but other than that, the market is focused on interest rates, growth, earnings, and President Trump’s policies.”

European stocks are also rising amid questions about the future of Greenland, Denmark’s autonomous territory in the Arctic Circle, and what President Trump’s determination to seize the island means for NATO and the continent’s defense. The pan-European Stoxx 600 index rose about 4%.

“The bottom line is there are a lot of issues, but they are not having an impact through investor sentiment or activity at the moment,” said Toni Meadows, head of investments at UK-based BRI Wealth Management.

“That’s not always the case,” he added. “Greenland is a bigger deal in terms of impact because this is an internal NATO discussion, so if at some point the market believes that Mr. Trump is going to threaten a military conflict, then the market will react,” he said. “But for now, it’s about staying close to the news flow.”

Benjamin Jones, head of global research at Invesco, told CNBC in an email that geopolitics, military conflicts and unconventional policies have historically not weighed on portfolios as much as investors feared.

“Many geopolitical events are alarming, but markets are indifferent and only react meaningfully and sustainably to these events when they impact economic fundamentals or lead to policy changes,” he said.

“History is clear: Stock markets have historically performed well during the 12 months following spikes in geopolitical risk.”

In fact, the MSCI AC Asia-Pacific index, which tracks large- and mid-cap stocks from 15 Asia-Pacific countries, has risen more than 5% this year, hitting an all-time high. Japan’s benchmark Nikkei 225 and South Korea’s Kospi have similarly hit record highs in recent days.

Market watchers said the increase was not due to investor complacency, but to fundamentals such as the absence of a major oil shock and expectations that accommodative monetary policy and AI investment would continue to support profit growth.

“The impact of geopolitical events is usually transmitted to global markets through oil prices, but the oil market has not seen any major shocks so far,” said Yap Phuc Hien, senior investment strategist at Standard Chartered.

Yap added that Asian investors and global stock markets are further driven by policy stimulus such as US interest rate cuts and AI investment, all of which support strong earnings growth prospects this year.

“Geopolitics remains the key risk, but the shock since Liberation Day in April 2025 has conditioned markets to respond more calmly to President Trump’s actions,” he said, referring to President Trump’s announcement of a series of tariffs on April 2.

Sheehan Aveigna, Southeast Asia managing director at Morningstar, told CNBC that markets may now view geopolitics as “a chronic risk rather than an acute shock.”

He added that valuations in Asia are not high enough to make the market vulnerable to a prolonged decline without a real shock.

Aveigna said geopolitical concerns in the region “tend to be more of a correction, so it would have to be a real unexpected shock that changes earnings expectations.”