The stock markets almost always take a hit with every war or major global disruption, particularly those that impact oil producing countries, whether it be the Cuban Missile Crisis, the Yom Kippur War, the Gulf War, or Russia's invasion of Ukraine. The US-Iran conflict is no different, although it has the potential to be a much bigger upheaval, what some are calling "the biggest oil disruption in history".
After every such event, though - even partway through sometimes - the markets find a way to come to terms with the perceived risk, and returns to pre-war levels, usually within a matter of days. For example, this took just 28 days.in the cae of the 2003 Iraq War, 27 days for the 2022 Russia-Ukraine war, 7 days for the 2025 US bombing of Iran. The 1990 Gulf War took longer at 131 days, and the 1973 Yom Kippur War and Arab oil embargo took as long as 6 years for the stock exchanges to get back to pre-war levels. But investors can take heart that, even in the worst cases, share prices do recover (and then go on to ever-increasing record levels).
The same will happen with the current US-Iran conflict, although it could takes a while, particularly with the unpredictable Trump at the helm of the US efforts. The stock exchanges always seem to me irredeemably naïve in some ways. For example, all it takes is Trump saying "the war is very complete, pretty much" for the markets to react positively and oil prices to correct themselves a little, even though what he said didn't actually make sense, comes amid mixed messages from others in the administration and even from Trump himself, and is an opinion based anyway on absolutely nothing. The war is far from "complete", and a resolute Iran says, "we are the ones who will determine the end of the war".
But end it most certainly will, one day. And you can bet that, within weeks, the stock exchanges will be be back at, or near, record levels.
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