Stocks are at risk from the Iran-Israel conflict. Here’s how quickly the S&P rebounded from the greatest shocks since WWII.
From Yahoo Finance: 2025-06-18 14:45:00
Deutsche Bank Research found that the S&P 500 tends to quickly recover from geopolitical shocks, rallying within weeks. The index has only crashed over 20% twice in history, after Hitler’s annexation of Czechoslovakia and the Nazis invading France. The S&P typically falls 6% over 17 trading days and fully rebounds within 16 days.
Currently, the S&P 500 has only dipped 1% since the Israel-Iran conflict began. Deutsche Bank strategists predict a quick recovery if the benchmark stock index does slide. However, a stronger market reaction could occur if the US directly gets involved or if Iran disrupts oil production or shipping in the Strait of Hormuz, which accounts for 20% of global trade flows.
Historically, the S&P has taken years to recover from major events like the 1970s oil crisis, falling an additional 28% over 12 months after hitting a trough. Despite this, the index has also seen significant rebounds, such as a 42% surge following the Israel-Hamas conflict in 2023. The S&P tends to bounce back swiftly from most geopolitical disruptions, offering some reassurance to investors.