The Iran war has been on the minds of investors since U.S. airstrikes on Iran began on Feb. 28. The economically vital Strait of Hormuz has largely been closed, shutting off oil and gas shipments to markets around the world that depend on them. Oil prices have spiked. All this bad news and global uncertainty might have driven nervous investors to sell their stocks and flee to the perceived safety of cash or bonds.
And yet stocks have rebounded. On Thursday, the S&P 500 index closed at a record high of 7,041.28. After a sluggish start to 2026, the S&P 500 is now up 2.9% year to date and has gained 11% since hitting a low on March 30 during the Iran conflict.
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War is a tragedy, and it’s understandable that people feel worried, saddened, and preoccupied by the distressing news from war headlines. But the Iran war, like other conflicts in the past, is proving to be a bad reason to hit “sell” on your stocks.
Let’s look at a few reasons why the stock market has remained resilient amid the Iran war — and why peace could bring more good news for investors.
War causes terrible human suffering to the people involved, but the economic consequences to the rest of the world are often limited. Investors often get fearful when a war starts, and wars can cause short-term volatility in stock prices. But in the long run, the stock market tends to adjust to the news headlines and keep moving up for unrelated reasons.
According to research from Fidelity, a close connection doesn’t exist between recent wars and long-term stock market performance. This seems to hold true whether a conflict involves smaller countries like Kosovo or Iraq, or major exporters of energy and food, like Russia and Ukraine. For example, ever since Russia invaded Ukraine in February 2022, the S&P 500 is up by more than 60%.
This general historical trend is a powerful reason why selling stocks based on war headlines is often a bad move for long-term investors. Most wars are relatively “small” compared to the global economy.
Another big reason not to sell stocks during a war is the importance of corporate earnings. Wanting to own a share of future corporate profits is the biggest reason to buy stocks. And most of the time, wars don’t stop companies from earning money.
