In this post. The Nasdaq fell more than 1%, but energy stocks rose as U.S. oil prices rose 2.4%.
Bitcoin fell 4%, dropping from $66,000 to $BTC Geopolitical conflicts usually cause short-term declines, and markets usually take 47 days to recover. The day before, the U. S. stock market fell more than 1% as investors grew wary after Iran fired a missile at Israel. While the overall market fell, energy stocks #rose as the price of crude oil in the U. S. rose 2.4%, defense-related stocks also rose.
the global #cryptocurrency market also saw significant index gains as the fear and greed index returned to "fear" territory. As tensions escalate, experts suggest that we are on the brink of World War III. However, when Russia invaded Ukraine, the S&P 500 Index fell 11% in just three months.
Iran's missile strike on Israel has already pushed oil prices to $74.56 and $70.94 a barrel. For the first time in recent months, the market is assessing the real risk of a major war. Historically, the S&P 500 Index falls an average of about 2% when a major conflict breaks out. The overall average drop is about 8.2%. However, other factors such as an economic downturn also play an important role in the overall scenario.
The Covesey Letter mentions that the average 12-month return in the absence of a recession is positive 9.2%, while during a recession it is negative 11.5%. Economic conditions play a crucial role in shaping market returns.
During World War II, the S&P 500 Index first fell and then rose as the market saw the war as an opportunity for U. S. economic growth; after the attack on Pearl Harbor in 1941, the U. S. market rose sharply, largely due to government spending and war production.
When the war ended in 1945, the DJIA Index had risen to around 200. But the recent conflicts have been very different. That's when the Federal Reserve started raising interest rates, which it has been doing since 2022: the S&P 500 Index fell 18% in 12 months.
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