Recent military actions by the U.S. and Israel against Iran have sharply escalated tensions in the Middle East, sending ripples through global financial markets. As oil prices surge and inflation fears are rekindled, investors are beginning to question whether the Federal Reserve’s rate-cutting cycle might be derailed.
Yet, amidst this geopolitical storm, historical data may offer a calming perspective. Ryan Detrick, Chief Market Strategist at Carson Group, has analyzed 43 major geopolitical and historical events since 1940, revealing the long-term resilience of U.S. stocks in the face of crisis.
Since President Donald Trump began his second term in January 2025, the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite have all posted double-digit percentage gains, building on the impressive 57%, 70%, and 142% increases seen during his first, non-consecutive term. However, this upward trajectory has been far from smooth. The five-week COVID-19 crash in early 2020 and the market plunge following Trump’s “Liberation Day” tariff and trade policy announcement in April 2025 both tested investor nerves. Now, the conflict with Iran has emerged as a new source of uncertainty.
Following the outbreak of hostilities, the price of Brent crude oil rose accordingly. According to data from the U.S. Energy Information Administration, approximately 20 million to 21 million barrels of oil and condensate pass through the Strait of Hormuz daily. With Iran’s exports now largely halted, this represents about 20% of global petroleum liquids consumption. Soaring energy prices threaten to stoke inflation, potentially disrupting market expectations for continued Fed rate cuts. Moreover, the S&P 500’s current Shiller P/E Ratio is higher than at any point in the last 155 years except for the dot-com bubble, leaving the market acutely sensitive to any sign of trouble.
Faced with this anxiety, Ryan Detrick has chosen to widen the lens. His team compiled a list of 43 major geopolitical and historical events since 1940—including the attack on Pearl Harbor, the Cuban Missile Crisis, the Gulf War, the 9/11 terrorist attacks, and the 2008 financial crisis—and analyzed the subsequent performance of the S&P 500.
“While major geopolitical events are known to increase short-term volatility, history shows us that they rarely, if ever, have a lasting negative impact on the U.S. economy or the stock market,” Detrick noted. The data reveals that following these 43 events (40 of which occurred more than a year ago), the S&P 500 was higher 65% of the time 12 months later, with an average return of 3%.
While this 3% average gain is below the S&P 500’s long-term annualized return, the fact that the market rose in two-thirds of all instances is telling: geopolitical uncertainty typically does not alter the long-term trajectory of businesses or the economy. “When fear is rampant,” Detrick emphasized, “maintaining historical perspective is one of the most powerful tools an investor has.”
This is not to say that investors should ignore risk. Energy prices, inflation data, and Federal Reserve policy will remain critical variables in the coming months. However, as Carson Group’s research demonstrates—from Pearl Harbor to COVID, from the Cuban Missile Crisis to the War on Terror—U.S. stocks have ultimately digested these shocks and continued to advance along the track of economic growth.
“The long-term drivers of the market have always been corporate earnings, innovation, and the resilience of the U.S. economy,” Detrick concluded. “The Iran conflict will undoubtedly create volatility. But for investors who can maintain their resolve, time remains on their side.” Against a backdrop of high valuations and complex headlines, the lessons of history may prove more valuable than any short-term prediction.
