Jakarta, CNBC Indonesia - Global geopolitical tensions and the\nescalation of military actions between nations are frequently among the\nprincipal factors triggering investor concern and large-scale selling by\nmarket participants.<\/p>\n
Following the outbreak of the conflict on 28 February 2026 in Iran,\nthe S&P 500 rose by 0.04% at the opening of trading on Monday 2\nMarch 2026, reflecting relatively limited investor worry.<\/p>\n
Although the gain was modest, the index began to fall on Tuesday 3\nMarch 2026, slipping 0.94%, in line with historical patterns where\nmarkets experience a brief sell-off.<\/p>\n
Even so, at yesterday\u2019s close on Wednesday 4 March 2026 the index\nclosed up 0.78%, indicating investor calm amid the evolving geopolitical\ndynamics.<\/p>\n
Psychologically, institutional and retail investors tend to relocate\ntheir portfolios to safe-haven instruments in the early stages of a\ncrisis.<\/p>\n
Nevertheless, a deeper review of historical data since 1979 shows\nthat the S&P 500, the main benchmark of the US stock market and a\nglobal barometer, has historically displayed a robust ability to\nwithstand shocks and recover.<\/p>\n
Based on quantitative data, the impact of a conflict\u2019s outbreak on\nstock markets is generally temporary and rarely disrupts long-run growth\ntrends.<\/p>\n
Here is a summary of the percentage movements of the S&P 500\nmeasured from the start date of various global conflicts:<\/p>\n
Limited volatility in the early phase of a crisis<\/p>\n
Referring to the metrics above, the movement of the S&P 500 over\na one-week to one-month period after the outbreak of the conflict has\nbeen volatile but still fairly moderate. The S&P 500, the benchmark\nindex on Wall Street, has moved within a range that remains\nmoderate.<\/p>\n
The most significant negative reaction occurred during the Iraqi\ninvasion of Kuwait in August 1990, i.e.\u00a0the Gulf War, when the index\nfell 4.4% in the first week and corrected more deeply to -9.3% in the\nfirst month.<\/p>\n
This was heavily influenced by shocks to global oil supply,\ntriggering dramatic energy price spikes at the time and directly\nthreatening corporate profit margins.<\/p>\n
Conversely, in modern cases such as the Crimea annexation (2014) or\nRussia\u2019s invasion of Ukraine (2022), markets did not record a correction\nin the first week.<\/p>\n
This suggests that early market panic is often driven more by\nshort-term uncertainty (noise) than by real fundamental economic\nchanges.<\/p>\n
Dominance of Macroeconomic Factors in the Long Term<\/p>\n
Market performance trends show a much more directional and stable\npattern when viewed over a 12-month period after the conflict\nbegins.<\/p>\n
From eight major events recorded in modern history, six of them\nmanaged to deliver positive returns within one year.<\/p>\n
Gaza War conflict (October 2023) recorded the highest rise with\nS&P 500 growth of 32.2%, followed by the US invasion of Iraq (2003)\nat 27.0%.<\/p>\n
A sharp decline occurred during the period of the US invasion of\nAfghanistan (2001) with a correction of -26.7% in 12 months. However,\nfurther analysis shows that this weakness was fundamentally driven by\nthe dot-com bubble and the recession, depressing valuations rather than\nsolely due to the military invasion.<\/p>\n
Similarly, the -6.1% drop following Russia\u2019s invasion of Ukraine\n(2022) occurred as the Fed\u2019s monetary tightening cycle to curb inflation\npost-pandemic was in progress.<\/p>\n
Focus on Fundamentals and Valuation<\/p>\n
Examining the historical data confirms a crucial principle in the\ndynamics of financial markets: geopolitical shocks rarely serve as the\nsole catalyst that reverses long-term trend directions.<\/p>\n
Market attention ultimately returns to corporate earnings growth\nprospects, liquidity in the market, and the trajectory of central bank\npolicy rates when responding to events.<\/p>\n
These fundamental conditions have proven to have far more influence\nin shaping valuations and stock index movements than temporary\nfluctuations arising from geopolitical sentiment.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/wall-streets-biggest-drop-since-the-gulf-war-what-about-the-iran-war-1772705605", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }