S&P 500 up 13% six months into Iran war, outpacing historical averages
- S&P 500 rises 13% six months into Iran war, beating historical average of 7%
- Index up 10% at three months, exceeding the 3% historical average
- Analysis covers 23 US military actions since Pearl Harbor
- Long-term averages show 46% gain after three years and 227% after ten years
- SPY ETF up 12.1% year-to-date in 2026
*this image is generated using AI for illustrative purposes only.
The S&P 500 has risen 13% six months after the start of military action in Iran, outperforming historical averages for similar geopolitical events. This resilience comes despite higher oil prices and investor concerns about continued strikes.
Creative Planning Chief Market Strategist Charlie Bilello analyzed data from 23 US military actions dating back to Pearl Harbor. The analysis indicates that while short-term volatility is common, long-term market returns tend to be positive.
Historical Context
Bilello notes that "all wars eventually come to an end," and economic earnings often grow over the long run even during conflicts. The current performance aligns with this historical pattern.
| Military Conflict | Start Date | S&P 500 3 Months Later | S&P 500 6 Months Later |
|---|---|---|---|
| Proxy War in Ukraine | 02/24/2022 | -8% | -1% |
| Financial & Military Aid – Gaza | 10/07/2023 | +9% | +22% |
| Strikes Against Houthi Targets – Yemen | 03/15/2025 | +6% | +18% |
| Strikes on Iranian Nuclear Sites | 06/22/2025 | +13% | +15% |
| Iran War | 02/28/2026 | +10% | +13% |
What the Numbers Show
The S&P 500’s 13% gain at the six-month mark exceeds the historical average return of +7% for the same period across 23 conflicts. Similarly, the +10% return at three months beats the historical average of +3%. This divergence suggests the current market reaction to the Iran conflict has been more positive than typical historical precedents in the immediate aftermath.
Across the full dataset, the index was down only five times at the six-month mark. Over longer horizons, the average returns are significantly higher: +46% after three years and +227% after ten years. The only instance where the index remained negative for three, five, and ten years was following the Kosovo War in 1999, largely attributed to the subsequent dot-com bubble burst.
Market Outlook
President Donald Trump has suggested the Iran War could be declared over soon. The S&P 500 peaked in mid-August, and an official end to hostilities may see the market test those highs again. The SPDR S&P 500 ETF Trust (NYSE: SPY) is currently up 12.1% year-to-date in 2026.
How might a formal declaration of the end of the Iran War impact oil prices and inflation expectations in the second half of 2026?
Given the historical outlier of the Kosovo War, what specific economic indicators should investors monitor to ensure the current market rally is not masking underlying structural weaknesses?
To what extent could prolonged supply chain disruptions in the Middle East offset the positive equity returns driven by post-conflict sentiment?
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