The conflict with Iran has taken center stage in recent weeks. The headlines are loud, gas prices are rising, and it’s natural to wonder whether now is the time to step back from markets.
From an investment perspective, it’s important to take a breath and look at the data. History offers a surprisingly reassuring story when it comes to investing during periods of geopolitical uncertainty.
Going back to the Korean War in the early 1950s, the S&P 500 has averaged a 14.2% return in the 12 months following major global events.
There have been some negative exceptions to the average, but these periods warrant some additional context. The 9/11 attack was in the midst of the dot-com bubble, and the Ukraine conflict coincides with the 2022 inflation surge. Even including these periods with heightened headwinds, it’s a good reminder that markets are often more resilient than our fears suggest.
What about rising oil prices specifically? While they’re well off the recent high of around $120 per barrel, crude oil prices have soared more than 50% so far in 2026. The concern is understandable, as higher energy costs can put pressure on consumers and businesses.
However, the data shows there’s a low, but slightly positive correlation between oil prices and the stock market. Historically, average stock market returns have actually been a little higher when oil prices rise than when they fall.
Since 1980, oil prices have risen in 25 years and fallen in 22 years. During the years where oil prices are higher, the S&P 500 has been positive 83% of the time with an average return of 13.52%. In the years where oil prices are lower, the S&P 500 has been positive 82% of the time with an average return of 12.95%. Each year is different, but the price of oil doesn’t tend to have a notable impact on the stock market.
Geopolitical events are unsettling by nature, but they don’t derail investors who stay the course. Markets have a way of looking past the headlines and focusing on the longer-term economic picture. Making emotional, reactionary decisions during periods of uncertainty is one of the most reliable ways to undermine your financial plan. In this type of market environment, it’s important to remain patient, diversified, and stay focused on your long-term goals. A strong financial plan is built to weather exactly these kinds of moments.
– The Aspire Wealth Team
