The second full week of 2026 has been a bit calmer on the geopolitical front than the first. Odds of a large-scale U.S. intervention in Iran look to be fading, which should be a reminder to markets that there are practical limits on President Donald Trump's powers of action.
Trump appears to have decided not to take immediate action against the Tehran regime. Advisers told the president that a strike was unlikely to topple the Iranian government, The Wall Street Journal reported. While that doesn't rule out a future move, investors are reducing bets on a U.S. attack, lowering oil and haven asset prices.
Markets are trying to price in the Trump administration's so-called "Donroe Doctrine" of U.S. dominance after the surprise Venezuela raid. Hedge funds eye emerging-markets debt in countries such as Cuba and Colombia, betting on regime change. Retail investors have flocked to bid up anything apparently related to Greenland such as New Jersey-based drivetrain company Greenland Technologies -- which in reality has nothing to do with the Danish territory, which Trump has said the U.S. must acquire for security purposes.
Oil and gold look like more sensible plays on global risk for the average investor and the latter is more attractive. While disruption in Iran has the potential to drive up crude prices -- the Middle Eastern country accounts for around 3% of global oil production -- the oil market is still likely looking at a surplus in 2026, according to Goldman Sachs. Meanwhile, Trump has repeatedly said he favors an oil price of around $50 a barrel, down from current levels of $60 or above.
Gold is supported by several factors. On top of being a safe asset in the face of a more unpredictable U.S. administration, it provides hedging against dollar debasement and is fueled by continued buying by central banks. Analysts at HSBC project gold will climb to above $5,000 an ounce in the first half of 2026 from around $4,600 currently.
Investors can't ignore geopolitics but nor should they necessarily believe all the noise around the White House's supposed overseas intentions -- and bets on unpredictable political events certainly shouldn't dictate a portfolio.
-- Adam Clark
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Taiwan Companies Offer U.S. Chip Investment for Lower Tariffs
Taiwan companies pledged to invest at least $250 billion to build and expand advanced semiconductor, energy, and artificial intelligence production capacity in the U.S., which will lower tariffs on products from Taiwan in turn, the latest in President Donald Trump's push to build critical industries at home.
-- The Commerce Department said the trade deal would drive a "massive
reshoring" of America's chip sector, strengthen U.S. economic resilience,
create high-paying jobs, and bolster national security. The U.S. is
cutting tariffs on Taiwanese goods to 15%, from 20%, and exempting
Taiwanese chip companies like TSMC.
-- Taiwan's government will provide $250 billion in credit guarantees to
help companies make the investments. Apart from the so-called reciprocal
tariffs, U.S. levies on Taiwanese auto parts, timber, lumber, and wood
derivative products are also set at 15%. Generic drugs, aircraft
components, and certain natural resources won't have tariffs.
-- Beacon Policy Advisors analyst Owen Telford told Barron's that the deal
aligned with expectations and the standard trade agreements the Trump
administration has already struck. "I'll be curious how China reacts and
whether this could end up creating any headaches for Trump, as he
searches for a deal with Beijing," Telford said.
-- TSMC, which got several billion dollars through the 2022 Chips and
Science Act, makes the chips that are critical to companies such as Apple
and Nvidia. It is expanding its operations in Arizona and bought land
that could help them expand more, Commerce Secretary Howard Lutnick told
CNBC.
What's Next: TSMC beat expectations with its annual capital expenditure forecast for this year, setting a range of $52 billion to $56 billion. That's well ahead of its $40.9 billion capex for 2025 and suggests confidence the AI chip surge is set to be a long-term phenomenon.
-- Tae Kim, Adam Clark, and Reshma Kapadia
***
Goldman Sees Possible Opportunities in Prediction Markets
Goldman Sachs CEO David Solomon said his firm is considering potential opportunities in prediction markets, an emerging business that has gained a significant following in financial markets. He recently met with leaders of two of the biggest prediction markets to learn more about it.
-- He told analysts he can see areas where prediction markets cross into
Goldman's business. The top two are privately held Kalshi and Polymarket,
which has a data partnership with Barron's publisher Dow Jones. Solomon
said some of the activities regulated by the Commodity Futures Trading
Commission look like derivative activities.
-- Prediction markets offer trades in contracts tied to the outcome of
events, such as elections, policy decisions, and economic data releases.
Solomon said they are studying the regulatory structure developing around
the business and where it sees capabilities or the chance to work with
clients in prediction markets.
-- Goldman Sachs and Morgan Stanley both posted record annual revenue in
their investment banking and trading divisions in 2025. The country's six
largest banks collectively reported a record $593 billion in revenue and
about $157 billion in combined profit last year.
-- Goldman topped its peers in revenue from equities trading and financing,
with 2025 revenue of $16.5 billion from the business, up 23% from the
year before. Revenue from fixed income, currency, and commodities rose 9%
to $14.5 billion, while advisory fees rose 21% for the year to $9.3
billion.
What's Next: Solomon said mergers and acquisitions this year could be close to or surpass the 2021 record. Bank executives are confident that despite the risks of inflation and global conflict, 2026 could bring more initial public offerings, more M&As, and more private-equity deals.
-- Rebecca Ungarino and Janet H. Cho
***
Verizon Offering $20 Credits After Resolving Service Outage
Dealing with a second day of fallout after an hourslong system outage affecting millions of users, Verizon Communications said it resolved the issue, which it blamed on software, and offered $20 credits to customers, redeemable through its app. But lawmakers are urging changes inspired by the incident.
-- Downdetector, a website that tracks internet and social media disruptions,
said Verizon received 2,341,170 reports of outages over 24 hours starting
midday Wednesday. About 60% were reporting problems with mobile phones,
35% reported no signal, and 5% had issues with mobile internet.
-- Verizon directed users to request the $20 credit through its myVerizon
app, and is contacting business customers separately. The company didn't
confirm the Downdetector numbers. The outage affected Apple iPhone models
14 and higher and some devices running Google's Android operating system,
The Wall Street Journal reported.
-- Sen. Ben Ray Luján (D., N.M.) is preparing legislation requiring
cable, internet, and phone companies to provide prorated refunds for
hourslong outages. New York state Assemblywoman Linda B. Rosenthal
sponsored a bill to require automatic outage-related refunds, telling
MarketWatch customers shouldn't have to "beg for it."
-- Bernstein Institutional Services analyst Laurent Yoon told Barron's that
he expects the outage to have a minor financial impact unless it becomes
a persistent issue. Verizon reports fourth-quarter earnings on Jan. 30.
What's Next: Verizon got the final approvals needed to clear its purchase of Frontier Communications, a fiberoptic broadband provider it agreed to buy in 2024 for $9.6 billion, including concessions to California regulators such as a spending commitment for small businesses. The transaction is expected to close next week.
-- Janet H. Cho
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White House Urges Congress to Take Up Healthcare Platform
The White House announced a healthcare plan that includes funding for health savings accounts and drug pricing deals, urging Congress to act. But some analysts said the policies would be hard to push through a divided Congress, which hasn't even agreed on whether to extend Affordable Care Act subsidies.
-- President Trump wants to appear proactive on solving affordability issues
but Veda Partners' director of healthcare research Spencer Perlman said
the policies would likely have a minimal impact even if enacted. The
announcement came on the final day for enrollment in ACA plans.
-- Subsidies that people used to cover the cost of plan premiums expired at
the end of 2025, and Congress hasn't agreed to extend them. Trump's
proposal doesn't endorse extending the subsidies. He proposes paying
money directly to health savings accounts controlled by individuals, to
purchase insurance.
-- The plan also has provisions aimed at making costs more transparent to
consumers. Healthcare providers and insurers that accept Medicare and
Medicaid should clearly display their pricing and fees, it says. Raymond
James analyst Chris Meekins said there was no legislative path forward
for much of the plan.
(MORE TO FOLLOW) Dow Jones Newswires
January 16, 2026 06:45 ET (11:45 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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