Traders Ready For ‘Donroe Doctrine’ to Fuel Market Moves in 2026

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(Bloomberg) — 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. 

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Gaming out how 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 President James Monroe’s doctrine in a national security strategy published last month. 

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“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.  

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

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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. 

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

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Technology 

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The technology sector — which has the heaviest weighting in US markets — is also likely to see the biggest disruptions if China’s President Xi Jinping responds to US hegemony in the Western Hemisphere by taking a more aggressive stance on Taiwan. 

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

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“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. 

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

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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 US-based chipmaker Intel Corp., which could benefit if global supply chains are disrupted. The stock is up more than 28% so far this year.

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Defense 

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