How the Iran War Compares With Past Market Shocks, in Charts
Investors are racing to respond to the largest oil-supply disruption in history
By David Uberti and
Jared Mitovich, The Wall Street Journal, March 26, 2026
The stakes couldn’t be higher for the oil market.
As the Trump administration pursues peace talks with Iran while amassing additional troops nearby, traders warn that each day the conflict goes on will exacerbate the energy shock and thrust the global economy as well as stocks and bonds into further peril.
Tanker traffic through the Strait of Hormuz, a chokepoint for roughly 20% of the 100 million barrel a day oil market, has slowed to a trickle…Unlike in previous shocks, some of which lasted months or longer, Saudi Arabia and other major crude-oil exporters have a limited ability to step up spare production capacity while the strait is effectively closed…
While the market selloff seems steep, it is on par with reactions to past geopolitical shocks. The S&P 500 had retreated before the current war owing to fears that artificial intelligence could upend software, financial services and more. Investors say rich valuations in the U.S. stock market have exacerbated some of the volatility since then…
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The article has a chart of the 1970-2026 DJIA but I think it’s more valid to look at the inflation-adjusted SPX.
The inflation and oil shocks of the 1970s cause SPX to decline until 1982. The other big declines were the 2000 dot-com bubble burst (which resembled the AI frenzy of today’s bubble) and the Great Financial Crisis in 2008. The Gulf War and Ukraine War did not have significant, long-lasting impacts.
The 10 year TIPS yield is rising which shows that the market is concerned about rising deficits in addition to inflation.
The WSJ article is mostly focused on the extreme short-term market impacts (days) while most METARs are more long-term oriented. If the Iran war is only a flash in the pan it probably won’t have a long-term impact. But if it lasts longer, causes a recession and bursts the stock market bubble the impact could be longer than some METARs’ life spans.
Wendy