Money Rehab with Nicole Lapin How War in the Middle East Affects the Stock Market— and Your Wallet
Jun 13, 2025
Conflict in the Middle East creates ripples in oil prices and stock markets, leading to significant economic uncertainty. Insights into the historical context of U.S.-Iran relations help understand these patterns. Escalating tensions often cause declines in major indices like the Dow and S&P 500, impacting investor emotions. Strategies for navigating this volatility include focusing on long-term goals and considering safer investments like defense stocks and gold as markets fluctuate. It's a critical time for smart financial planning.
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Middle East Conflict Impacts Markets
- Conflict in the Middle East triggers sharp changes in oil prices and stock market volatility.
- Investors fear disrupted oil supply, driving economic uncertainty globally.
Historical Oil Shocks and Markets
- The 1973 Yom Kippur War led to an Arab oil embargo, quadrupling oil prices and causing US inflation and recession.
- In 1990-91, oil spiked then dropped after US military victories, with stocks recovering quickly.
Avoid Panic Selling
- New investors should resist panic selling during market dips caused by geopolitical fear.
- Long-term investors often see gains within 6-12 months after shocks once uncertainty clears.