>>60523516Wars and geopolitical conflicts often cause initial drops in the stock market due to increased uncertainty, but the long-term impact and recovery can vary significantly. Here's a look at some notable examples and the associated market drops:
Major Historical Wars and Market Impact:
1929 Crash & Great Depression (often associated with the lead-up to WWII): The stock market experienced its worst drop in 150 years, with a 79% decline from August 1929 to May 1932. While not solely caused by war, the global economic instability played a role in the political climate that led to WWII.
World War I (1914-1918): At the outbreak of WWI, stocks fell around 30%, and markets were closed for six months. However, when they reopened, the Dow rose more than 88% in 1915.
World War II (1939-1945):
The stock market actually rose by 10% just after Hitler invaded Poland in 1939.
After the Japanese attack on Pearl Harbor, stocks fell 2.9% but regained those losses in less than a month.
Overall, from 1939 until the end of the war in late 1945, the Dow saw increases of 50%.
Some sources also list a 49.9% decline from February 1937 to March 1938, attributed to the Great Depression and WWII.
Vietnam War (1961-1975) & Watergate: This period, starting in early 1973, saw a stock market decline of 51.9%. This downturn was influenced by a combination of civil unrest related to the war, the Watergate scandal, and high inflation from the OPEC oil embargo.
Korean War (1950-1953): The Dow Jones Industrial Average (DJIA) dropped 12.0% between June 23 and July 13, 1950. However, the market recovered, showing a 19.2% gain six months later.
Cuban Missile Crisis (1962): The market suffered a 22.8% drop around this time.