# War Won't Disrupt the Long Bull, Short Bear Trend in US Stocks

A psychological reassurance for ourselves and everyone:

Based on US stock data from 1940-2026, US stock performance after major geopolitical shock events:

**1 month:** Average -0.9%, Median -0.2%, Probability of gain 46%
**3 months:** Average +0.8%, Median +2.7%, Probability of gain 66%
**6 months:** Average +3.4%, Median +5.3%, Probability of gain 61%
**1 year:** Average +3.0%, Median +7.4%, Probability of gain 65%

The comparison reveals that geopolitical factors (wars/assassinations/terrorist attacks/escalating conflicts) such as the Cuban Missile Crisis/1967 Third Middle East War/2003 Iraq War/Russia-Ukraine conflict do not fundamentally alter the stock market's bear trend. Only "systemic financial risks" cause prolonged bear markets in US stocks.

Examples include (preceded by the 1973 Fourth Middle East War): the 1973 oil embargo/2008 financial crisis, where US stocks fell more than 30%.

After the 9/11 attacks in the US, stocks rebounded 18%, though most believe this was primarily influenced by the aftermath of the 2000 internet bubble burst. The post-9/11 reconstruction efforts actually benefited economic development.

Additionally, note that this table only includes various geopolitical conflict events and excludes other impacts (such as the COVID-19 pandemic). The table only shows price changes at expiration and does not account for maximum drawdown during the period. For example, the 2007/2008 financial crisis showed a 41% decline one year later in the chart, but the actual maximum decline was 46% for the S&P 500 and 45% for the Nasdaq.

Therefore, a US stock pullback of around 10% around this year's midterm elections seems about right. As for deeper declines, we don't see them currently.