Dow jumps and oil firms gain after Maduro’s ouster

Energy and defense stocks rose after the US ousted Venezuela’s president, Nicolás Maduro, and President Trump pledged American drillers would revive the country’s crude production.

The moves helped boost indexes, as did surges in growth stocks such as Tesla, Amazon and Palantir. The Dow industrials led gains among major benchmarks, rising about 800 points and hitting a new intraday high above 49000.

Oilfield-services stocks like Baker Hughes leapt, alongside refiners such as Valero. Chevron, the last remaining US oil major in Venezuela, gained, as did rivals ConocoPhillips and Exxon Mobil, which pulled out of Venezuela nearly 20 years ago. The prospect of greater geopolitical tensions lifted global defense stocks.

Oil prices were volatile. Brent crude futures—the benchmark for international prices—initially fell, before rebounding to trade higher. Energy traders say significant obstacles remain before Venezuelan oil flows more freely into global markets.

The full effects of Maduro being deposed, and how much control the US will have over Venezuelan oil will probably not be seen for quite a while. There are still a lot of questions about who exactly will be in charge of Venezuela, whether Maduro’s Vice President Delcy Rodriguez, a pro-US Venezuelan, or the US will effectively administer the country.

But President Trump mentioning that US oil companies will be heavily involved in obtaining Venezuelan oil certainly had a positive effect in the markets for oil firms. Venezuela has the largest amount of oil reserves of any country in the world.

There are still many steps that need to be taken, but as of now, the markets are responding positively to the US’ ouster of Venezuelan dictator Nicolas Maduro.