Markets and wars. What to expect for 2024

Chrysostomos Makis Bollas

Chrysostomos Makis Bollas

In the complex world of global finance, geopolitical events often have a profound impact on stock markets. Recent conflicts, such as the war in Ukraine between Russia, and the tensions in the Middle East involving Israel, Gaza, and Palestine, have left investors speculating on the potential repercussions for financial markets. To gain insights into the potential trajectory of the stock markets following these conflicts, it’s worth examining historical data from past geopolitical events.

The 1970s and the Iranian Revolution:

The 1970s witnessed geopolitical tensions, particularly with the Iranian Revolution in 1979. The revolution led to a surge in oil prices, contributing to global economic uncertainty. However, historical data suggests that despite the initial turbulence, stock markets eventually rebounded. The resilience of the markets following this period indicates that, over time, they tend to recover from geopolitical shocks.

The 1990s and the Gulf War:

The Gulf War in the early 1990s, triggered by Iraq’s invasion of Kuwait, is another case study. The conflict caused a temporary dip in stock markets as investors grappled with uncertainties. However, as the conflict concluded and stability was restored, markets gradually regained their footing, showcasing a similar pattern of recovery.

Examining Recent Conflicts:

More recently, conflicts such as the ongoing tensions in Ukraine and the strife between Israel, Gaza, and Palestine have generated concerns among investors. To gain a deeper understanding, we can look at the aftermath of other contemporary geopolitical events.


The September 11, 2001 attacks and subsequent military actions in the Middle East created a period of economic uncertainty. Initially, stock markets experienced a downturn. However, concerted efforts by central banks and governments, coupled with a gradual return of investor confidence, contributed to a recovery in the following years.

The Financial Crisis of 2008:

While not directly linked to geopolitical conflicts, the 2008 financial crisis serves as a relevant example of market resilience. The crisis originated from the collapse of the housing market and financial institutions. Despite the severity of the downturn, global markets eventually rebounded, demonstrating their ability to recover from significant shocks.


While predicting the precise trajectory of the stock market after geopolitical events remains challenging, historical data provides valuable insights into market behavior following conflicts. Examining specific instances, such as the Iranian Revolution in the 1970s and the Gulf War in the 1990s, can shed light on the resilience of financial markets.

In the aftermath of the Iranian Revolution, which saw oil prices surge and global economic uncertainty rise, the stock market initially experienced a decline. However, a closer look at the data reveals that, over the subsequent years, the markets rebounded significantly. For instance, the S&P 500, a broad indicator of U.S. stock market performance, climbed from around 100 in 1979 to approximately 320 by the end of the 1980s.

Similarly, the Gulf War in the early 1990s caused a temporary dip in stock markets as investors grappled with uncertainties surrounding the conflict. Despite this initial setback, stock markets demonstrated resilience. The S&P 500, for instance, rebounded from around 300 in 1990 to approximately 670 by the end of 1999.

Turning to more recent events, such as the aftermath of the September 11, 2001 attacks and the subsequent military actions in the Middle East, statistical data reveals a pattern of recovery. In the immediate aftermath of 9/11, the S&P 500 experienced a decline, but by the mid-2000s, it had surpassed pre-9/11 levels. The index continued its upward trajectory, reaching around 1,500 by the end of 2007.

The 2008 financial crisis, while not directly tied to geopolitical conflicts, is another noteworthy example. In the midst of the crisis, the S&P 500 experienced a significant downturn, dropping from around 1,500 in 2007 to approximately 680 in 2009. However, over the subsequent years, markets staged a robust recovery, reaching new highs by the mid-2010s.

In conclusion, the historical data indicates that, despite initial market downturns in the wake of geopolitical events, stock markets tend to recover over time. The ability of markets to bounce back is influenced by various factors, including government responses, central bank interventions, and overall economic conditions. While past performance does not guarantee future results, investors can draw on these historical examples to inform their understanding of market dynamics and make more informed decisions in the face of geopolitical uncertainties.

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