Wall St rallies as energy, financials surge; Dow hits record high

CALIFORNIA: Wall Street’s major indexes climbed sharply on Monday, with the blue-chip Dow Jones Industrial Average hitting an all-time high, led by strong gains in financial and energy stocks following a US military strike in Venezuela.

US President Donald Trump said on Sunday—one day after Venezuelan President Nicolas Maduro was captured—that a second strike could follow if remaining members of the administration fail to cooperate with efforts to stabilise the country. Trump also said a US embargo on Venezuelan oil would remain in place.

Investors bet that political upheaval in Venezuela could eventually open access for US companies to the world’s largest proven oil reserves. The S&P 500 energy index rose 1.3 per cent, with Exxon Mobil gaining 1 per cent and Chevron climbing 4 per cent.

Defence stocks also advanced after the military action. Lockheed Martin rose 2.5 per cent, while General Dynamics gained 2.8 per cent. The broader aerospace and defence index climbed 1.2 per cent to a record high.

By 10:15 am ET, the Dow rose 600.51 points, or 1.24 per cent, to 48,982.9. The S&P 500 gained 45.32 points, or 0.66 per cent, to 6,903.79, and the Nasdaq Composite added 203.37 points, or 0.88 per cent, to 23,439.00.

Financial stocks provided the biggest boost to the Dow. Goldman Sachs jumped 4.75 per cent to a record high, while JPMorgan Chase and American Express rose 3 per cent and 2.6 per cent, respectively.

Wall Street ended last week lower after investors pared exposure to technology stocks. On Monday, however, the tech sector stabilised, edging up 0.2 per cent, with Nvidia gaining 0.6 per cent.

Tesla stood out among gainers, rising 4.2 per cent after seven consecutive sessions of losses, lifting the consumer discretionary sector by 2.1 per cent.

 “With markets taking geopolitics in stride so far, the first trading week of the New Year will likely hinge on whether tech stocks can regain momentum after a weak finish to last year,” said Chris Larkin, managing director of trading and investing at E*TRADE from Morgan Stanley.

Last week’s declines ran counter to expectations of a so-called “Santa Claus rally,” a seasonal trend in which stocks typically rise during the final five trading days of December and the first two sessions of January.

Despite the recent pullback, the three main indexes posted double-digit gains in 2025 for the third straight year—a streak last seen from 2019 through 2021. The Dow recorded its eighth consecutive monthly gain in December, the longest such run since 2017–2018.

Investors are now focused on Friday’s US nonfarm payrolls report, a key indicator that could influence the Federal Reserve’s monetary policy outlook for 2026. Markets are currently pricing in roughly 60 basis points of interest rate cuts this year, according to LSEG data.

Meanwhile, fresh data showed US manufacturing activity contracted more than expected in December.