Insights

The events involving Iran have had a swift impact on the markets. Stock indices have been declining, and there remains uncertainty regarding the outcome. One explanation for the downturn is concern over rising oil prices, as this affects a wide range of businesses.

The scope of the impact is highly dependent on the duration of this conflict, and that is impossible to predict. Domestic politics, fiscal considerations, and competing global commitments are not supportive of a long-term escalation. Potential impacts can range from weaker equity prices and a rally in sovereign bonds to higher inflation. The U.S. economy is reasonably insulated due to domestic energy production. Immediate concerns are more pronounced for Europe, Japan, and broader Asia. That, of course, eventually affects the U.S., as we are part of a global economy.

The good news is that these oil disruptions are not unusual, and U.S. stock markets have historically rebounded well following past events.

U.S. stock markets often recovered from geopolitical oil disruptions

Sources: Capital Group, Bloomberg, Standard & Poor’s. Specific geopolitical events that are reflected in average returns figures include: First Gulf War (August 1990), Second Gulf War (March 2003), Niger Delta supply disruptions (February 2006), Arab Spring and Libyan civil war (February 2011), Hormuz closure risk and Iran sanctions (December 2011), drone attack on Saudi oil stations (September 2019), Russian invasion of Ukraine (February 2022). Event dates are aligned to the nearest observable market price (“T”). If a shock occurs on a non‑trading day, the prior trading day is used as the start date. Horizon returns are measured using the first available trading day on or after the stated calendar horizon (e.g., “T+2 days”). Past results are not predictive of results in future periods. Figures reflect total returns. As of March 10, 2026.