In my 30+ years in wealth management, I have advised clients through terrorist attacks, pandemics, and wars. None are predictable from a market perspective. We treat them as "tail risks," but they aren't built into our base case.
With the recent conflict with Iran, I pulled historical data on how oil and capital markets have reacted during and after previous conflicts. The results may surprise you.
In the nine major oil-tied regional conflicts since 1980, oil prices rose just 5% one month in ... then fell 4% at six months and 5% at one year (1). Capital markets told a similar story. The S&P 500 jumped 12.5% during Desert Storm and 31.9% twelve months later (1). Ahead of the Iraq invasion in 2003, U.S. stocks rallied 28.7% and global stocks 33.1% for the year (1).
Before the Iran conflict, there was plenty of chatter about markets being overdue for a pullback. History suggests otherwise. The median bull market of the last century lasted five years. We are currently in month 41 (2).
One final thought. Mid-term political years historically see modest equity returns through the first three quarters, followed by an average Q4 gain of 6.4% (3). The following two quarters are positive 88% of the time, driven largely by post-midterm gridlock, which markets tend to welcome (3). Patience in the first three quarters has historically rewarded equity investors in the three that follow.
On a personal note, I look forward to April and am hopeful this conflict reaches a peaceful resolution. I continue to pray daily for our military and their families. Until next month.
(3) https://nypost.com/2026/01/26/business/for-the-patient-a-2026-stock-market-miracle-awaits/