Wall Street bulls need a lot to go right if 2026 is going to deliver a fourth straight year of double-digit returns. Trade tensions between the US and its neighbors remain high. The US economy is showing signs of sluggishness, interest rates are elevated even after three cuts and the artificial intelligence trade is far from a slam dunk.

Then there's geopolitics. While the US military operation in Venezuela didn't hit sentiment on American financial markets, the out-of-the-blue nature of the action reminded investors just how tenuous any trading thesis can be in a world undergoing generational geopolitical changes.

"We think people are sleeping on the macro risks — and this is a macro risk we didn't even see," Christopher Harvey, head of equity and portfolio strategy at CIBC Capital Markets, said of the US intervention in Venezuela in an interview with Bloomberg Television Monday. 

So far, the raid that captured President Nicolas Maduro has been met with a shrug on Wall Street. The S&P 500 Index rose 0.6% on Monday and crude oil edged higher. Some haven assets advanced, notably gold and US Treasuries. But the Cboe Volatility Index remain subdued, trading below 16.

To Harvey, the reaction mostly makes sense, but it also underscores his view that investors have become inured to risks after a three-year rally that pushed stocks higher by roughly 80%. There have been blips along the way, notably the days-long rout after President Donald Trump first unveiled his tariff plans in early April. Since then, though, the S&P 500 has rallied a stout 39%, with every pullback seen as a buying opportunity.

"There's been a heck of a return since Liberation Day, and I think people have gotten very, very comfortable," Harvey said.

Sell-side strategists are anticipating stocks to rally for a fourth year in 2026, with the average of 21 prognosticators surveyed by Bloomberg seeing a roughly 9% gain. None see the index ending the year lower.

Uncertainty, of course, is an ever-present risk for investors. But as 2026 gets going in earnest on global financial markets, the CIBC strategist says the growing propensity among traders to look past identifiable threats could lead to pain. 

Harvey pointed to investor expectations that the Federal Reserve will execute two more rate cuts this year as being potentially overly optimistic given persistent inflation. He also suggested Corporate America, after watching share prices soar in recent years, might dial down expectations for further profit growth, undercutting a key pillar of the bull case.

Trump continues to wield the threat of tariffs as a cudgel in negotiations with friend and foe alike, making the outcome unpredictable. The trade agreement he negotiated with Mexico and Canada in his first term is up for tweaks, and progress there has been in fits and starts. Geopolitical turmoil persists, with the Russian war in Ukraine, unrest in Iran and tensions in Southeast Asia. 

And as the weekend's events highlighted the potential for unknowns in 2026 that can quickly reassert themselves, Harvey is warning that the coming months could be marked by "acute bouts of risk aversion." He's urging clients to position their portfolio for turbulence by taking a high-quality tilt. Harvey is worth listening to, as one of few strategists who last year correctly predicted stocks would quickly and sharply rebound from April's tariff turmoil.

Others across Wall Street point out that while Venezuela's events alone are contained, investors should remain on alert. 

"The events that transpired over the weekend are a stark reminder that investors should continue to view policy — whether it be fiscal, monetary or geopolitical policy — as a source of volatility rather than a suppressor," said Frank Monkam, head of macro trading at Buffalo Bayou Commodities. "Cross-asset volatility contamination risk clearly raises the level of vulnerability for equities at a juncture where we are flirting with all-time highs and historically-rich valuations."

To Dan Suzuki, investment strategist at Schroders , the complacency in part has to do with recency bias, given corrections have been short-lived in recent years and investors are sitting on double-digit equity returns for three years in a row, and in seven of the last nine years.

"Economic and earnings growth has held up well, with additional near-term support stemming from the government reopening, big anticipated tax returns and accelerating business investment to name a few," he said. "That combination probably has investors thinking more about ways to capture upside than about protecting from downside." 

For now, seasonality may smooth any short-term moderate bumps. A theory known as the January effect, which holds that US stocks tend to rise more in the first weeks of a calendar year than in other months, is so far bearing out. The S&P 500 is up 0.8% in the year's first two trading days.