Market snapshot: looking at the wider picture

Despite developments in Venezuela, investors have been looking at the wider picture which has resulted in several major global indices hitting record highs as the new year gets off to a flying start.

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The S&P500 and Dow Jones Industrial Average were the latest to scale record closing highs, following similar performances over the last couple of trading sessions from the likes of the UK and Japan. The relative lack of reaction to the weekend news emanating from the US and Venezuela is indicative of wider market optimism, with those actions a reminder of brittle geopolitical tensions globally rather than a driver itself.

In the meantime, it appears that until proven otherwise, the AI trade remains in rude health. A positive session on Wall Street included a strong performance from Magnificent Seven stalwart Amazon.com Inc (NASDAQ:AMZN), while more broadly the likes of Palantir Technologies Inc Ordinary Shares - Class A (NASDAQ:PLTR) and Micron Technology Inc (NASDAQ:MU) continued their ascent, with the latter already ahead by 16% in the first few days of 2026 trading and by 237% over the last year.

Indeed, the prospect of tax cuts, lower interest rates and tech enthusiasm have led to a broader rally as investors hedge their positions, with the smaller-cap Russell 2000 index also rising on the day and within a whisker of its own record high which was set last month.

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Attention will now turn to the state of the nation in terms of employment in the world’s largest economy, culminating in non-farm payrolls report on Friday. As a precursor, the ADP private payrolls and JOLTS (Job Openings and Labour Turnover Survey) are due later today and may give an early indication of what to expect, even though no interest rate cut is anticipated this month based on recent data, with March currently seeming most likely for the Federal Reserve to move again.

Asian markets were mostly lower overnight on geopolitical concerns, although not related in any way to Venezuela. The diplomatic rift between the region’s major powerhouses was exacerbated as China banned exports of goods to Japan which could have military uses, prompting the latter to describe the moves as unacceptable. The goods in question range from chemicals to electronics and sensors, and the spat is an unwelcome distraction from what had otherwise been a brisk start to the year for both markets.

A further dip in the oil price on concerns of potential oversupply as a result of developments in Venezuela weighed on BP (LSE:BP.) and Shell (LSE:SHEL), providing a headwind which dragged the FTSE100 back from the record closing high set yesterday.

In contrast, a rather more upbeat note on the telecoms sector and Vodafone Group (LSE:VOD) in particular lifted the stock by more than 2% to continue its recent run, although the share price remains down by 60% from the heady levels it scaled a decade ago.

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Defence stocks remained in focus given the increasingly fractious nature of several global relationships, with BAE Systems (LSE:BA.), Babcock International Group (LSE:BAB) and Rolls-Royce Holdings (LSE:RR.) continuing to attract buyers.

Despite the more guarded opening, the premier index remains comfortably above the psychological boost which came with hitting the 10,000 level, and its return to the top global investment table given an eclectic mix of constituents could continue to serve it well.