The Venezuela Playbook Is Old. The Markets Know It. (And So Do You, You Just Won't Admit It.)

Let me be direct: When the S&P 500 hits a record on the day the U.S. abducts a foreign president and seizes state assets, and oil barely budges, you're not looking at a new paradigm. You're looking at a market that has run out of reasons to be surprised by anything. And that's worse than volatility.

Here's What Happened (The Boring Version)

Over the weekend of January 4, the Trump administration executed a military operation in Venezuela that resulted in the capture of President Nicolás Maduro. Within 48 hours, the market had rendered its verdict: not actually that important.

The S&P 500 closed up 0.6% on Monday. The Nasdaq 100 gained 0.8%. Energy stocks—theoretically the primary beneficiaries of U.S. control over the world's largest proven oil reserves (303 billion barrels)—saw some pop, but nothing ecstatic. Chevron, the best-positioned U.S. major to scale production, rose modestly. Oil itself?

West Texas Intermediate added 1.7% to settle above $58 a barrel. A rounding error in a decade of energy prices.

The reason is simple and depressing: Markets already knew Venezuela was irrelevant. Venezuela currently produces less than a million oil barrels a day, which is less than 1% of global oil production. The IEA projects a market surplus of 3.8 million barrels per day in 2026. Even if U.S. companies successfully rebuilt Venezuelan infrastructure from scratch—a $58 billion undertaking, by some estimates—they'd be ramping up production into a global glut. The math doesn't work. Everyone knows it. Including the people who just took control of the country.

Here's What Actually Happened (The Interesting Version)

The market didn't care about Venezuela because it had already priced Venezuela out of existence. This is what we do now. We don't react to geopolitical events with shock and recalibration. We react by checking whether the event had been anticipated in options markets six weeks ago, and if it had, we shrug.

On Tuesday, the S&P 500 hit a fresh record, closing at 6,858. The tech-heavy Nasdaq 100 Index climbed 0.9%, while the small-cap focused Russell 2000 notched a 1.4% gain. This was despite a slowdown in global stocks—Asian stocks slipped 0.6% following a rally that pushed them to the best-ever start to a year, with Japanese shares dropping 1% as China imposed controls on exports to the country. In other words, U.S. equities rallied while the rest of the world got weaker. That's not confidence in American exceptionalism. That's herd behavior looking for anywhere to hide.

The real story isn't Venezuela. The real story is that we're now at a stage in this bull market where geopolitical shocks—literal U.S. military intervention in a sovereign nation—barely register as noise. We've become immune to the idea that the world can change dramatically overnight.

What This Tells You About What Comes Next

Here's the uncomfortable truth: If the U.S. government can seize control of a nation's oil industry and the market shrugs, then the market has already accepted that the rules of international law are... decorative.

That doesn't mean oil prices will collapse. (They probably will eventually, but not because of Venezuela.) It means the perception of risk has shifted. Geopolitical events no longer send investors reaching for gold and bonds. They send them to CES in Las Vegas to hear about Nvidia's new AI chips.

Nvidia just announced the launch of its next-generation Vera Rubin superchip at CES 2026, comprising six new chips designed to deliver one incredible AI supercomputer. AMD is right behind them, with CEO Lisa Su announcing that AI is "absolutely the No. 1 priority at AMD." And the market is pricing all of this as if earnings growth will automatically follow.

Except—and this is the part everyone's dancing around—valuations are already cooked. The S&P 500 is priced for perfection. Energy sector stability. Tech sector dominance. A Fed that plays ball. Earnings that materialize exactly when people expect them. And a geopolitical backdrop that, apparently, doesn't matter anymore unless it directly disrupts semiconductor supply chains.

That's an incredibly fragile consensus. It's held together by the shared belief that AI will solve every problem and that the Fed will keep rates low enough that nothing else matters. And maybe that's right. But you should at least notice that nobody's questioning it anymore. The Venezuela test case just proved we're way past the point where ground truth penetrates the market narrative.

The Silence Is the Story

What worries me isn't that oil didn't spike. What worries me is that nobody's discussing the precedent. A U.S. military operation captured a foreign head of state and his wife. The global oil market—which has moved on geopolitical events for the entire modern era—barely flinched. The message being sent is: Geopolitics is theater. Economics is all that matters. And as long as semiconductors are shipping and quarterly earnings beat, nobody's going to force a reckoning.

That's not a stable foundation. That's a casino pretending to be an exchange.

The market will keep climbing as long as the AI narrative holds. Earnings will probably beat low expectations. Tech will probably consolidate power. And if there's political turbulence—whether in Venezuela, the Middle East, or anywhere else—the market will process it the same way it processed this: as a data point that was already priced in, or irrelevant to the value of Nvidia in 2026.

But somewhere, someone is keeping track of the precedents. And one day, the market will realize that geopolitical risk hasn't gone away. It's just been deferred. And when that day comes—when oil finally does spike, or a supply chain genuinely breaks, or confidence in any part of the system cracks—the complacency will reverse with the force of something that was always building beneath the surface.

Until then, we watch records fall. We watch Venezuela disappear from the headlines by Wednesday. And we pretend the world still makes sense while accepting that it almost certainly doesn't.