Global wars have generally played a crucial role in revolutionizing the markets as we speak. The currently evolving US-Iran war is also triggering a historical setup, the one that usually allows investors to explore potential dips before it surges back to its all-time high. With the S&P 500 exploring new lows as the US-Iran conflict intensifies, is this development triggering a seasoned war trend that rebuilds markets from scratch?

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S&P 500 War Upheavals Or a Blessing in Disguise?

Global markets are currently bleeding dry, with major Asian markets opening to record lows amid the ongoing US-Iran conflict. With the US threatening to obliterate Iranian power plants and waterways, this conflict has now taken a crucial shape. This development is weighing on global markets, driving major volatility, as major Asian indexes have now dipped to mirror volatility prevalent in the market. Asian markets are panicking as prolonged closure of the Strait of Hormuz may elevate their energy crisis, making the situation more grave in every way.

However, historic market setups tell a different story. Per the latest post by the Kobeissi Letter, the S&P 500 is now down 5% entering into its 15th day of volatility. Historical timelines show how markets often react better post the 15th day during heavy wars, with the average recovery timelines scheduled to kickstart soon.

“Is the market setting up for a rally? The S&P 500 is down -5% since the Iran War started, now 15 trading days into the sell-off. In previous geopolitical conflicts, US stocks bottomed around day 15 on average, based on over 30 major geopolitical shocks since 1939. The current sell-off is tracking almost exactly in line with the historical average and median path. After the typical bottom, the average recovery lasted for ~40 trading days. From there, stocks tended to move higher after reaching their pre-event levels. Is the usual geopolitical playbook set to repeat?”

Such a developer may, in turn, deliver a buying opportunity to investors, giving them a chance to explore discounted stock prices.

Prolonged Closure of Strait Is Impacting Global Markets

Per a new KL post, with the extended closure of SoH and Trump issuing a new warning to obliterate Iran’s power plants, the markets have started to react to this growing pressure. The S&P 500 at present is down 0.7%, with Nasdaq and Dow Jones reporting 0.7% and 0.6%, respectively.

“BREAKING: US stock market futures fall at the open as markets react to President Trump’s ’48-hour deadline’ for Iran to open the Strait of Hormuz. 1. S&P 500: -0.7%. 2. Nasdaq 100: -0.7%. 3. Dow Jones: -0.6%. 4. WTI Crude: +2.0%. 5. Brent: +1.5%. 6. Gold: -2.5%. President Trump’s deadline is now 25 hours away.”

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