- There's one place where the recent US-Iran crisis has barely registered so far: the stock market.
- In the immediate aftermath of an American airstrike that killed Iranian military commander Qassem Soleimani last week, investors on Wall Street so far have largely dismissed escalating tensions in the Middle East that some fear could lead to a full-blown war between the United States and Iran.
- Part of it is simply uncertainty surrounding the situation - and traders have learned to determine which incidents are likely to be isolated.
- Others say that investors have experienced an era of political and economic blows that have strengthened their ability to weather a crisis.
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There's one place where the recent US-Iran crisis has barely registered so far: the stock market.
In the immediate aftermath of an American airstrike that killed Iranian Gen. Qassem Soleimani last week, investors on Wall Street so far have largely dismissed escalating tensions in the Middle East that some fear could lead to a full-blown war between the United States and Iran.
The benchmark S&P 500 slid 0.7% in its first day of trading following the strike, but then rebounded 0.4% during the following session before trading slightly lower on Tuesday.
It's a stark contrast to Washington's stumbling response that experts say underscore the Trump administration's lack of a strategy dealing with the attack's fallout.
There are reasons for investors' careful confidence amid another round of tumult in the Middle East. Part of it is simply the uncertainty surrounding the situation - and traders have learned to determine which incidents are likely to be isolated.
"If 2019 taught us anything, it's that you have to try as best as possible to keep to your process and not get caught up in the headlines," Strategas technical analyst Todd Sohn told the Washington Post. "In a sad way, I wonder if we've become used to it. I wonder if the market has learned to discount these events."
Others say that investors have experienced an era of political and economic blows that have strengthened their ability to weather a crisis.
"Part of the reason may be purely psychological. Today's investors have seen the stock market recover from both 9/11 and the Great Financial Crisis, arguably the greatest geopolitical and economic shocks of our time," wrote JPMorgan funds global chief strategist David Kelly in a client note. "This makes it easier for investors to shrug off other events."
Kelly also suggested the American economy is now less vulnerable to drastic changes in energy prices than it used to be.
LPL Financial, a brokerage firm, reviewed the S&P 500's performance after geopolitical crises stretching back to World War II and found any market drops often recovered in far less than a year.
The stock market's performance after momentous events over the last two decades undercore its resilience. 20 days after the 9/11 attacks and the Brexit referendum, the S&P 500 had increased 4.9% and 6.4% respectively, the Post reported.
"As serious as this escalation is, previous experiences have indicated it may be unlikely to have a material impact on U.S. economic fundamentals or corporate profits," John Lynch, the chief investment strategist at LPL Financial, wrote in a client note.
He added: "We would not be sellers of stocks into weakness related to this event, given stocks have weathered heightened geopolitical tensions in the past."
Still, fallout from the tensions could spill into individual sectors like energy or airlines, the latter of which recently dropped on fears of higher prices for jet fuel.
