Investors are bracing for a year of heightened geopolitical risk as

the White House

leans into the “Donroe Doctrine,” the Trumpian revival of a 200-year-old foreign policy that aims to project American dominance in the Western Hemisphere and possibly beyond.

Gaming out how

U.S. President Donald Trump

’s policy shift might ripple throughout assets is no easy task: His moves have often been unpredictable and can impact a range of markets, from energy prices to imports of chips that power the

artificial intelligence

industry. Trump’s administration spelled out its intention to build on former president James Monroe’s doctrine in a national security strategy published last month.

“It’s worth taking a step back and looking at the longer-run implications, because I do think that there’s a strategy, call it portfolio framing, for what’s going on from a geopolitical perspective,” said Sam Rines, a macro strategist at WisdomTree.

So far, the ouster of Venezuela’s

Nicolas Maduro

has proved a mere blip for the record-breaking run in U.S. stocks, reinforcing the notion that the broader equity market seldom dwells on geopolitical risks for long. Still, there is no shortage of cross-currents under the surface: Calls for increased military spending have sparked rallies in defence stocks, while investors are focusing on potential U.S. moves in regions including Greenland, Iran and Cuba — and weighing how China and Russia might respond.

Meanwhile, oil prices jumped on Tuesday after Trump said Iran will “pay a big price” for killing protesters, bolstering the case for those who believe 2026 will see conflicts intensify around the globe.

Here’s a quick rundown of how geopolitical risk could sway markets in the months ahead.

Technology

The technology sector — which has the heaviest weighting in U.S. markets — is also likely to see the biggest disruptions if

China’s President Xi Jinping

responds to U.S. hegemony in the Western Hemisphere by taking a more aggressive stance on Taiwan.

Nvidia Corp.,

the most valuable stock in the U.S., derives 16 per cent of its revenue and finds 15 per cent of its suppliers in Taiwan, a global hub for chip production. Moreover, the S&P 500 Semiconductors and Semiconductor Equipment group now carries a 14 per cent weighting in the broader index.

“If suddenly Taiwan was taken off the grid, that would have a massive, massive negative implication on our stock market,” said Mark Malek, chief investment officer at Muriel Siebert & Co.

Tensions around Taiwan would put the focus on Taiwan Semiconductor Manufacturing Co., which counts many of the biggest technology companies in the United States among its customers, including Apple Inc., Nvidia, Broadcom Inc. and

Amazon.com Inc.

On the flip side, companies that have contracts with the Pentagon, such as Palantir Technologies Inc., could reap rewards from heightened geopolitical risk, Malek said. Investors have also been buying shares of U.S.-based chipmaker Intel Corp., which could benefit if global supply chains are disrupted. The stock is up more than 28 per cent so far this year.

Defence

Defence stocks, which were recently whiplashed by a slew of social media posts from Trump, may offer relative protection over the longer-term.

The prospect of a more conflict-prone world, along with a proposed increase in U.S. military spending, has already given the sector a strong start to 2026: Among the winners are shares of contractors L3Harris Technologies Inc. and Huntington Ingalls Industries Inc., which have advanced 16 per cent and 21 per cent year-to-date, respectively.

“If it’s going to be a less stable situation for a long period of time, then obviously the defence contractors are a stable rotation against that type of volatility,” said Brian Mulberry, client portfolio manager at Zacks Investment Management Inc., who likes shares of bigger defence names such as RTX Corp. (formerly Raytheon) and General Dynamics Corp.

Other areas of the sector also hold opportunities if tensions spike, according to Joseph Shaposhnik, portfolio manager at Rainwater Equity LLC., which holds shares of Loar Holdings Inc. and TransDigm Group Inc.

“Given the Trump administration, it’s very possible that some of these businesses will be viewed as growth stocks over the next couple of years,” he said.

Energy

Crude prices jumped for a fourth straight session on Tuesday after Trump’s warning to Iran renewed investor focus on the possible consequences of U.S. military action against the oil-rich country.

Yet the jump in prices has done little to change skeptics’ minds on one “Donroe Doctrine” centrepiece: the call for companies to drill in Venezuela.

Exxon Mobil Corp.

drew Trump’s ire after calling the South American country “uninvestable” last week.

Recent gains in shares of Halliburton Co., Baker Hughes Co. and SLB Ltd. may have been an over-reaction that could reverse as investors consider the time it may take to open up Venezuela’s oil sector, said Matt Maley, chief market strategist at Miller Tabak + Co.

Indeed, the biggest winners within the energy sector from Trump’s removal of Maduro may be refineries, which usually outperform when prices are low.

“The refineries on the Gulf Coast will be the biggest beneficiary because of the increasing supply of heavy crude on the market,” said Simon Wong, a portfolio manager at Gabelli Funds.

Materials

While investor attention has been concentrated on the potential for energy stocks, the metals and mining sector has also notched sharp gains.

Shares in Critical Metals Corp., a rare earth minerals and lithium explorer with assets in Greenland, soared 84 per cent last week as Trump administration officials openly discussed the possibility of using the U.S. military to take the north Atlantic island from Denmark. Greenland is rich in

critical minerals.

Other miners in that subsector, including MP Materials Corp. and USA Rare Earth Inc., also jumped as Trump officials and European leaders traded barbs, with Danish officials warning about the end of NATO.

Yet jumping into materials stocks comes with its share of downside. The rally in rare-earths stocks may have been fuelled by investors expecting China, angered by a lack of access to Venezuelan oil, to retaliate by placing restrictions on the metals, according to Steve Sosnick, chief strategist at Interactive Brokers.

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Miller Tabak’s Maley said that gold and silver prices breaking out to new highs following the capture of Maduro are evidence that investors are looking for hedges in anticipation of more geopolitical turmoil.

“The world is not getting any safer,” he said.

Bloomberg.com