The Donroe Doctrine Is Creating A Major Shift in Financial Markets

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The big idea behind this policy is that the US is asserting American supremacy in the Western Hemisphere, including a specific aim to counter influences from China, Russia, and Iran. This is being done through a mix of military interventions, economic coercion, tariffs, and strategic asset acquisitions. You saw this materialize with the capture of Venezuelan President Nicolás Maduro in January. There have also been threats to reclaim the Panama Canal, bids for Greenland’s sovereignty, and efforts to rename the Gulf of Mexico as the “Gulf of America.” From a strategy execution standpoint, the doctrine prioritizes securing U.S. access to critical resources like oil, minerals, and trade routes while disrupting adversarial supply chains. This aggressive “Americas First” stance has injected significant volatility into financial markets, reshaping asset prices across energy, equities, emerging markets, and bonds. Initially, the market reaction was rather subdued, but the doctrine’s implementation has now started to trigger measurable shifts. Investors are doing their best to navigate a situation where geopolitics can be more important than economic fundamentals in the short-term. A great example of the current complexity is in the energy market. The Donroe Doctrine’s focus on rerouting energy flows in the Western Hemisphere has profoundly impacted oil markets. By targeting Venezuela, and the fact they previously exported 50 million barrels of oil to China annually, the U.S. is trying to bolster domestic supply and reduce reliance on Middle Eastern imports. WTI crude prices have been responding. We saw $75 per barrel in late 2025, but prices had fallen to approximately $68 earlier this month. This likely reflects expectations of increased Venezuelan supply under U.S. influence and the decline underscores the doctrine’s potential to stabilize U.S. energy costs, which can be seen in various analysts projecting long-term price reductions of 10-15% from enhanced integrations throughout the Western Hemisphere. The U.S. equity market is another interesting data point. We have seen widespread resilience (remember the S&P 500 is up around 4% YTD) driven by optimism over domestic energy security and reduced import dependencies. Yet, the VIX has averaged 18 during this period, which is up from 14 in late 2025. In my opinion, this signals a feeling of uncertainty among investors from potential trade disruptions. The sectors that are most sensitive to global trade, such as semiconductors, have unsurprisingly faced material faced headwinds. For example, the iShares Semiconductor ETF (SOXX) has declined 3% based on fears of Chinese retaliation affecting supply chains. One area that may not get a lot of love normally, but has the full attention of investors right now, is emerging market debt. Venezuelan bonds have surged dramatically post-Maduro’s capture. Investors are essentially betting on U.S.-facilitated restructuring. That is looking more likely after the US and Venezuela announced an effort to re-open diplomatic ties over the last 48 hours. More broadly, analysts are forecasting double-digit returns for EM debt in 2026. This is supported by falling inflation and currency values. So this begs the question: Has the Donroe Doctrine been good for financial markets? Proponents argue the doctrine enhances U.S. energy security by redirecting resources from adversaries, which could potentially lower oil prices by 10-15% and foster self-reliance. It creates opportunities for American firms in distressed assets (like Venezuelan oil fields) boosting sectors like energy services and infrastructure. By countering Chinese influence, it strengthens alliances with aligned Latin American governments. It also promotes economic patriotism and reduces migration pressures through regional stability. For investors, high carry in EM bonds and selective equities offer diversification amid U.S.-centric risks. There is obviously a counter-argument though. Critics will highlight significant drawbacks. They will claim tariffs on Mexico and Brazil have raised U.S. household costs by 2-3%, eroded exporter competitiveness through retaliation, and created uncertainty that hampers investment and hiring. The critics will also say geopolitical backlash risks escalating tensions. There could be strained relationships with NATO over Greenland bids, along with triggering market corrections in AI and trade-sensitive assets. And analysts warn of midterm electoral backlash if economic pains outweigh gains, which could potentially constrain the doctrine’s scope. So my general takeaway is that as the Donroe Doctrine unfolds, it represents a paradigm shift toward assertive U.S. hemispheric dominance. This blends military might with economic tools. Financial markets have adapted with gains in energy and select EM assets, but volatility and risks persist. Investors should balance resource-driven opportunities against global fragmentation. They should favor high-carry EM debt and diversified equities. While the doctrine promises “America First” prosperity, its long-term success hinges on managing backlash and delivering tangible economic benefits. In this evolving landscape, you have to keep your head on a swivel. Hope you have a great end to your week. I will talk to everyone on Monday. - Anthony J. Pompliano Founder & CEO, Professional Capital Management How Bitcoin Could Get To $10 MILLION Per Coin Brian Dixon is the CEO of Off The Chain Capital. 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