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
***The Barron’s Daily is taking a break for the holiday and will next publish on Tuesday, Jan. 20, 2026.
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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.
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