Risk assets are ever-so-slowly transitioning from trading like the old, global order playbook still holds, while the Trump administration keeps showing that the rules are changing. Today was a case in point: Stocks gained and so did traditional havens like gold and Treasuries.
The US raid that captured Venezuela’s Nicolas Maduro is a further regime-shift signal for global markets, not because it guarantees a lasting shock, but because it makes geopolitical tail risks fatter going forward. This adds to Trump’s pattern of “act first, negotiate later” from the Iran strike to tariffs-as-sanctions and even maritime pressure where coercion becomes the first tool, not the last resort.
Nonetheless, equities can keep rallying on AI exuberance, rosy earnings expectations and a Fed-induced increase in liquidity, yet the path forward is less certain when US policy looks more unilateral, mercantilist and less constrained by post–Cold War norms. President Donald Trump is explicitly framing national security around commerce, territory and resources, where the ends justify the means.
The market’s first read on Maduro’s ousting Monday captured the tension. Stocks pushed modestly higher even as gold rallied more than 2% and Treasuries caught a bid. That isn’t confusion, it’s dispersion, in other words what a fat-tail regime looks like when risk appetite remains healthy, but hedges are increasingly justified.
As a result, skew matters as much as spot vol because it prices the shape of risk, not just the day-to-day bumpiness. In a calm market, at-the-money implied vol can stay low because nothing has happened lately, even as investors quietly pay up for downside insurance. When a shock hits, tail hedges reprice in a fast and lumpy manner, skew widens and crash protection gets expensive, often before spot fully reacts. In Trump’s more transactional, multipolar world, risk assets need to carry a bigger downside premium, with put skew staying steeper even when headline vol looks calm.
“Safe haven” also becomes a contested category. Gold benefits in a norms-lite world because it’s nobody’s liability. The dollar and Treasuries don’t automatically win if investors start associating US-driven shocks with inflation and fiscal-deficit risks or a de-dollarization global pushback.
Finally, real assets, such as chips and physical holdings of natural resources, earn a strategic premium when they turn into national security assets, even over their financial instrument equivalents. Trade distortion plus supply security can create squeezes even while real demand stays weak, making a bird in the hand worth at least two in the bush.
