In the days since the outset of the U.S.-Iran war, stock markets have followed a familiar historical pattern: an initial selloff on the news, followed by some volatility and a slight recovery.
“The U.S. equity selloff seems to have reversed in short order, which makes sense,” Scott Helfstein, head of investment strategy at investing firm Global X, wrote in a note earlier this week. “Geopolitical events generally lead to brief periods of heightened volatility, but markets are usually quick to recover losses and tend to move higher in the subsequent weeks.”
Indeed, since 1979, the S&P 500 has risen by 2.2%, on average, in the month following wars, geopolitical events and energy crises, according to data from Stock Trader’s Almanac.
During periods of market volatility and geopolitical uncertainty, it can be tempting to pull your money out of the market. After all, even if the market tends to bounce back over the long run, scary headlines can drive stock prices down in a hurry. Investors don’t have to think back too far to remember when a slate of new U.S. tariffs caused a 19% decline in the stock market in 2025.
But financial pros generally advise against making any big changes to your long-term plans based on what’s happening now.
