What history tells us about markets during wartime
Jun 23, 2025 12:43 pm
Hi,
Just wanted to share a quick market update, especially with all the headlines about the US-Iran conflict recently.
The US has carried out strikes on Iranian nuclear sites. While it’s unclear what happens next, tensions are high. If Iran retaliates by closing the Strait of Hormuz, which handles 20% of global oil flow, it could send oil prices up and impact inflation and global growth. This might delay U.S. interest rate cuts, and cause short-term market jitters.
But here’s what take reference from past history:
📊 History shows that markets are more resilient than we expect — even during wars.
- In 2001, after the US attacked Afghanistan, the S&P 500 rose steadily, as part of the post-9/11 recovery.
- In 2003, markets rose ahead of the Iraq invasion and held steady after the event.
- These patterns suggest that markets often price in bad news early, and may even bounce back as uncertainty clears.
Trump and Tehran can still make a deal
There’s still a chance for diplomacy. Some experts believe Iran could take a bold step like offering to meet US leaders in exchange for a halt to Israeli strikes. At the same time, Iran might withdraw from a key nuclear treaty to show strength at home without taking extreme actions like shutting the Strait of Hormuz.
If both sides show flexibility, for example, Iran pauses uranium enrichment and the US tones down its tough demands, it could open the door to a new agreement. This path gives Iran a chance to avoid full-blown war and lets Trump claim a diplomatic win without putting US troops into another long conflict.
What this means for you:
It’s a reminder to stay calm, stay diversified, and avoid emotional decisions. Short-term volatility is normal—but long-term discipline pays off.
Let me know if you’d like a refresher of your portfolio positioning.
In the next few days, I will be sharing why Trump's withdrawal from Europe actually can be a catalyst for Europe's economy to get stronger.
Warm regards,
Zest Chia
Executive Wealth Consultant | Associate Estate Planning Practitioner |
Licensed General Insurance Advisory
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