Stock markets remain flat on Iran, Greenland and Venezuela risks

The first two weeks of 2026 have seen the administration of US President Donald Trump arrest the president of Venezuela, threaten to retaliate against Iran’s crackdown on protests, and discuss the possibility of using force to occupy Greenland. So why are stocks rising?

It caused price changes in asset classes such as headlines gold, silver and oil as traders sought safe haven and weighed the impact of US involvement in the Middle East on oil supplies.

However, the stock markets seem to be rejecting the news. The S&P 500 markets have suffered three losses since the start of the new trading year and were up about 1.5% year-to-date at Thursday’s close. Much closer to home, tensions in Europe, Latin America and the Middle East, Asia-Pacific stocks also rose.

Wall Street’s three major averages gained despite the news, which appeared to shrug off US President Donald Trump. intention ordering troops operations abroad and dangers taking land from a close ally by force.

Along with the gains of the S&P 500, two other major Wall Street averages have risen this year: Dow Jones Industrial Average Added about 3%, and technologically heavy Nasdaq Composite increased by 1.2%.

Eric Friedman, chief investment officer at Northern Trust Wealth Management in Chicago, which manages $492.6 billion in assets, said Trump’s actions and rhetoric on Iran, Venezuela and Greenland have not affected markets because other major economic or military powers have not responded.

“Markets view these events in isolation, and each outbreak may require a unique response to fuel market volatility,” he said in an email to CNBC. “We don’t want to predict what will happen next, but if lines are drawn that affect trade in an increasingly sequestered world, we will have something to worry about beyond the human condition in a particular region.”

The US Supreme Court will soon have to rule on the legality of Trump’s tariffs, but in the meantime, global investors seem to be adjusting to the White House’s 2025. turnsFriedman said.

“A higher than expected escalation could prompt countries to renegotiate trade ties or threaten sanctions, but until they arrive, if an event occurs, markets will remain in a more active reactive mode and not necessarily reposition portfolios in anticipation of the event,” he added. “We would see the US dollar weaken if markets tend to be more prescriptive or feel defensive measures are warranted because the likelihood of an escalation is increasing.”

The US dollar indexwhich measures the greenback against a basket of major competitors, is up about 1% year-to-date.

Alex Morris, CEO of Washington, D.C.-based F/m Investments, called the stock market investor reaction “the stock market ‘meh.’

“Geopolitics is boiling, but not boiling. “The president’s use of highly targeted shows of force but little time in theater and staff operations leaves little for markets to react to.

“Short-term and recent events (no permanent commitment) give markets little to react to. News happens and that’s it. It also helps that there hasn’t been any meaningful response from Iran or Venezuela.”

Morris said the market’s muted reaction was driven by “increasing encouragement” from what Trump said and, increasingly, what he did.

“Despite significant measures, there is little immediate reluctance from the president and most of the activities in the flood zone have been canceled or cancelled,” he added. “The market has learned to temper enthusiasm and wait for receipts.”

Anthony Esposito, founder and CEO of AscalonVI Capital, said that markets have not focused on reducing geopolitical risk for some time.

“Israel bombed Iran – The S&P 500 fell 1% overnight to close just 50 bps. The US bombed Iran – there was no reaction,” he told CNBC.

“Venezuela, Greenland can be considered positive for the markets in the US and even for GDP, (but) regardless of whether,” he said, energy production, rare earth acquisitions, national security and infrastructure expansion.

“Iran is a wild card,” he added the market fell earlier this week, until “Trump did away with fear,” apparently refusing military action. “If something happened in Iran, the market would respond (oil higher, stocks lower, gold higher), but other than that, markets are focused on tariffs, growth, earnings and the Trump agenda.”

Stocks in Europe rose even amid questions about the future of Greenland, the self-governing Danish territory in the Arctic, and Trump’s determination to take the island. may mean For NATO and continental defense. The pan-European Stoxx 600 added almost 4%.

“The bottom line is that there are a lot of issues, but they have yet to be reflected through investor sentiment or activity,” said Tony Meadows, head of investment at UK-based BRI Wealth Management.

“That may not always be the case,” he added. “Greenland is a big deal in terms of exposure because it’s an argument within NATO, so if at some point the market believes that Trump threatens to turn it into a military conflict, then the markets will react,” he said. “But for now, it’s a case of staying close to the news flow.”

Benjamin Jones, head of global research at Invesco, said in an email to CNBC that historical geopolitics, military conflicts and unconventional politics have not weighed on portfolios as much as investors had feared.

“Many geopolitical events are troubling, but markets are volatile and only react meaningfully and sustainably when these events affect economic fundamentals or lead to policy changes,” he said.

“History is clear, capital markets have historically performed well in the 12 months following heightened geopolitical risk.”

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

Market watchers said the rise did not reassure investors, but fundamentals such as the absence of major oil shocks and expectations that easier monetary policy and AI spending would continue to boost earnings.

“The impact of geopolitical events usually spills over into global markets through oil prices, but the oil market has yet to see significant shocks,” said Yap Fook Hien, senior investment strategist at Standard Chartered.

Yap said Asian investors and global equity markets will be driven more by policy stimulus, including US rate cuts and AI investments, all of which support a strong outlook for earnings growth this year.

“Geopolitics remains the main risk, but the shock since Independence Day in April 2025 has forced markets to respond more calmly to Trump’s actions,” he said.

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

He added that prices in Asia have not been stretched long enough to leave markets vulnerable to prolonged declines without a real shock.

Geopolitical concerns in the region are “more calibrated, so it should be a real shock that changes revenue expectations,” Abeyguna said.