Defense Stocks Boosted by U.S. Intervention in Venezuela as Geopolitical Risk Rises

By Cristina Gallardo

European defense companies jumped in early European trading after the U.S. ousted Venezuelan leader Nicolas Maduro, while U.S. peers are expected to also trade higher when the market opens.

German arms maker Rheinmetall, U.K. defense company BAE Systems and French peer Thales surged 7.5%, 4.6% and 4.55%, respectively, in midday European trading after U.S. military forces captured Maduro in a surprise military operation in Caracas over the weekend. Italy's Leonardo rose 6%, while Spain's Indra Sistemas gained 5%.

In the U.S., Lockheed Martin gains 1.1% premarket, with futures for General Dynamics and Northrop Grumman climbing 1.3% and 0.9%, respectively. RTX is up 0.5%.

"The U.S. invasion of Venezuela and subsequent capture of Maduro has served to highlight the ongoing case for defense stocks," said Joshua Mahony, chief market analyst at Scope Markets.

President Trump's insistence on the need for the U.S. to control the Western hemisphere puts pressure on several Central and South American countries, including Cuba, Brazil, Mexico and Colombia, Mahony said.

"For traders, this means not only a heightened prospect of additional military action and regional instability, but also an emboldening of countries such as China that could see this as a green light to take the likes of Taiwan to control their own hemisphere," Mahony added.

Russ Mould, investment director at AJ Bell, said that heightened geopolitical tension like that seen over the weekend would normally spook investors. Instead, they appear to be taking the view that events in Venezuela won't lead to full-blown war, and are backing defense stocks on the premise that the U.S. intervention could spur governments to spend more on military protection, Mould said.

"Shares in defense companies briefly pulled back before Christmas on progress with peace talks between Russia and Ukraine, yet the U.S.-Venezuela situation has provided a new reason for investors to stay bullish," he said, adding that investors are also watching China even closer amid speculation it is slowly laying the groundwork for an invasion of Taiwan.

Write to Cristina Gallardo at cristina.gallardo@wsj.com

(END) Dow Jones Newswires

January 05, 2026 06:40 ET (11:40 GMT)