The US and Israeli strikes on Iran have rattled global markets, triggering sharp swings in oil, gold, and equities. Brent crude surged, gold climbed, and the S&P 500 whipsawed as investors grappled with the possibility of a prolonged conflict.
Whenever geopolitical tensions erupt, the first market reaction is often dramatic. Energy prices spike on supply fears. Gold rallies as investors seek safety. Stocks wobble amid uncertainty.
But history suggests that the first move is rarely the lasting one.
A review of past geopolitical shocks — including Iraq’s invasion of Kuwait in 1990, the Sept. 11 attacks, the 2003 Iraq War, US intervention in Libya, and Russia’s invasion of Ukraine — shows a consistent pattern. Markets tend to react sharply in the opening days, only to moderate or reverse course within weeks.
Consider the 12-day conflict between Israel and Iran in June 2025. When hostilities began on June 13, oil and gold jumped immediately while stocks fell.
Brent crude rose roughly 7% in the first trading session following the outbreak of fighting. Yet 30 trading days later, oil prices were slightly below where they had started.
Gold followed a similar trajectory. An initial pop of about 1.5% gave way to a modest decline over the next month.
Equities moved in the opposite direction. The S&P 500 fell just over 1% on the first day of trading after the conflict began but was up nearly 6% a month later.
The lesson: initial fear-driven moves do not necessarily define the medium-term trend.
The same dynamic appeared after other major events. Gold surged nearly 7% in the first trading session after the Sept. 11, 2001 attacks, reflecting a rush into safe-haven assets. But over the subsequent 30 trading days, gains were far more moderate.
Oil’s reaction to Russia’s invasion of Ukraine in 2022 was even more dramatic. Prices spiked more than 30% in the early days of the conflict amid fears of supply disruptions. Yet a month later, oil’s net gain had narrowed significantly.
Across multiple episodes, the direction of prices after the first day matched the direction one month later only slightly more than half the time. In other words, a sharp spike — or drop — offers limited predictive power.
There is, however, at least one important exception.
When Iraq invaded Kuwait in August 1990, oil prices jumped more than 11% on the first day and continued climbing, rising nearly 57% over the following month. Stocks also continued their downward trajectory, with the S&P 500 falling more than 10% over 30 trading days.
Even in that case, however, markets eventually recovered after allied forces expelled Iraqi troops from Kuwait.
The current conflict may ultimately chart its own course. The scale of military action, potential energy supply disruptions, and broader geopolitical consequences all remain fluid. Analysts have cautioned that it is simply too early to project where prices will settle in the weeks ahead.
Still, history offers a measured perspective. Markets often overshoot in moments of crisis, pricing in worst-case scenarios before recalibrating as new information emerges.
For investors, that pattern underscores a familiar reality: volatility may dominate the headlines in the first days of a global shock, but longer-term outcomes are rarely determined by the opening move alone.
