As war headlines ignite fear and oil prices flare, history offers a more composed verdict — markets have navigated every regional conflict since 1956 and have quietly begun doing so again.

SECTION 01 · THE FRAMEWORK

What Phase of the Conflict Are Markets Actually In?

History is littered with energy-centric regional conflicts. And while every war is unique in its human dimensions, markets respond with a remarkably consistent choreography — one that has played out across more than a dozen geopolitical crises since the Suez Crisis of 1956.

According to Fisher Investments’ analysis of S&P 500 data from 1956 to March 2026, the median equity return 12 months after a conflict’s start is +15.3%, with positive returns 66.7% of the time. The average is +10.1%. This is not an anomaly — it is a pattern.

SECTION 02 · THE DATA

How Have Markets Performed After Prior Conflicts?

Across every major energy-centric regional conflict since 1956, the S&P 500 has demonstrated a consistent — if sometimes delayed — recovery. The current Iran conflict is tracking in line with the 1990 Kuwait-Iraq invasion: steep initial declines followed by a powerful rebound.

SECTION 03 · THE STRAIT

Is a Hormuz Closure Truly as Catastrophic as Feared?

The Strait of Hormuz is the world’s most critical oil chokepoint, and its disruption is the headline markets fear most. But the numbers tell a more nuanced story than the doomsday framing suggests.

The commonly cited figure of 20% of global oil supply transiting Hormuz overstates the realized impact. After pipeline rerouting through Saudi Arabia’s East-West pipeline and UAE’s Abu Dhabi crude oil pipeline, the effective disruption to global crude supply is closer to 9 to 10% — significant, but not the civilizational shock some predict.

SECTION 04 · THE POLITICAL CATALYST

Why the US Midterm Elections Are a Hidden Bullish Force

Beyond geopolitical mechanics, there is a structural political incentive that markets are beginning to price: the 2026 US midterm elections in November.

The Trump administration faces a critical incentive: with historically slim congressional majorities and low approval ratings, a prolonged war increases the risk of seat losses to Democrats. Resolution pressure must crystallize by August campaign season. This political urgency may prove to be one of the most underappreciated catalysts for faster conflict resolution.

Add to this that political gridlock — the market’s preferred political outcome — keeps legislative risk low across the developed world. Combined with growing corporate earnings and steep global yield curves enabling lending without reigniting inflation, the foundation for a bullish next 12 months remains structurally intact.

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SECTION 05 · GEOGRAPHIC EXPOSURE

Which Regions Face the Greatest Risk from Sustained Disruption?

Not all economies are equally exposed to Gulf energy flows. If the disruption proves extended, economic pain will be unevenly distributed — and markets are already beginning to reflect this divergence.

SECTION 06 · THE BULL CASE

Why Remain Bullish With or Without a Ceasefire Holding?

Fisher Investments’ sustained bullish stance does not rest on the fragile assumption that the April 7 ceasefire holds. It rests on a more durable foundation.

SECTION 07 · PORTFOLIO INTELLIGENCE

How Should Portfolios Be Positioned Right Now?

Fisher Investments characterizes the current environment as consistent with a classic regional conflict correction — not a structural disruption to long-term economic growth. Portfolio implications flow directly from this framework.

SECTION 08 · FREQUENTLY ASKED QUESTIONS

What Sophisticated Investors Are Asking Right Now

Could this become a 1970s-style oil shock?

Highly unlikely. In 1973, OPEC nations were uniformly hostile to the West and controlled the majority of global supply. Today, the Gulf states are US allies. America is itself a major oil producer. Global economies are dramatically more oil-efficient. Iran is regionally isolated. The structural conditions for a generalized embargo simply do not exist.

Does the ceasefire need to hold for markets to recover?

No. Markets began recovering before the ceasefire announcement and continued processing information afterward — even as it became clear the Strait remained effectively closed. Markets look 3–30 months out and discount the probable outcome, not the daily headline.

What happens if the disruption drags on for months?

Even under a prolonged scenario, $100 oil is not historically catastrophic in real terms. Inflation-adjusted, current Brent prices are well below the 2008 peak. Global economies adapt through efficiency gains, supply substitution, and policy response — with economic pain distributed unevenly toward Asia and away from the Americas.

Should UHNW families make tactical shifts right now?

The current environment calls for discipline, not reaction. Fear-based pricing dislocations may emerge if market spreads widen further — those would be opportunistic entry points, not signals to defensively reposition. Long-term fundamentals supporting earnings growth over the next 3–30 months remain intact.

What is the single biggest risk to this thesis?

A multi-month total closure of the Strait of Hormuz combined with significant damage to Gulf oil infrastructure would represent a materially worse scenario — creating uneven but real economic disruption, particularly for Asia. This remains a risk worth monitoring, but is not the base case given the powerful alignment of interests among the world’s most powerful economic actors toward rapid resolution.