Dow Jones futures saw a marginal increase of 0.06%, trading near 48,650. Simultaneously, S&P 500 and Nasdaq 100 futures experienced gains of 0.14% and 0.38%, trading near 6,910 and 25,480, respectively.
Upcoming US ISM Manufacturing PMI data has captured market attention. Meanwhile, a US military operation in Venezuela has affected the indices, as President Trump announced a strike and the detention of President Maduro.
Venezuelan Operation Details
The operation occurred without congressional approval, aiming for a transition in Venezuela. Secretary of State Marco Rubio emphasised leverage over direct governance, while Trump hinted at possible interventions in the region if demands aren’t met.
Market participants await updates on Federal Reserve policies, following FOMC meeting minutes suggesting potential for holding off further rate cuts. Speculation surrounds a new Fed chair nomination potentially shifting policy towards lower rates.
The Dow Jones Industrial Average comprises 30 major US stocks and is price-weighted. It’s impacted by company earnings, macroeconomic data, interest rates, and inflation, which influence investor sentiment and costs for corporations.
Dow Theory, established by Charles Dow, identifies market trends through the DJIA and DJTA. Trading the DJIA can involve ETFs like SPDR DIA, futures contracts, options, and mutual funds.
Volatility And Energy Market
With markets digesting the military intervention in Venezuela, we should expect heightened volatility in the coming weeks. The CBOE Volatility Index (VIX), a key measure of expected market turbulence, has already risen over 25% in the last week to trade near 18, up from the calmer levels around 14 we saw in late 2025. Traders should consider buying protection, such as put options on the S&P 500, to hedge against any potential escalation or negative surprises from today’s ISM Manufacturing PMI data.
The most direct impact of the geopolitical tension is on energy markets, with WTI crude already pushing above $57 a barrel. The primary risk is the disruption of Venezuela’s nearly 800,000 barrels of daily oil production, a scenario that could push prices higher. This makes call options on major energy companies and long positions in crude oil futures a relevant strategy to capitalize on the ongoing uncertainty.
Beyond the immediate crisis, we must keep an eye on the Federal Reserve, as the replacement for Fed Chair Jerome Powell in May looms large. The prospect of a more dovish chair could push long-term interest rate expectations down, which would be bullish for growth-oriented sectors. Traders could look at longer-dated call options on the Nasdaq 100 to position for this potential policy shift later in the year.
In times of conflict, capital flows toward safe-haven assets. We are already seeing this with Gold surging above $4,400 an ounce and the US Dollar index (DXY) hitting a strong 98.80. Continuing to hold positions in gold futures or gold-backed ETFs can provide a buffer, while the strong dollar may create headwinds for multinational industrial companies that rely on foreign sales.
