If a war in Iran sends oil prices 100%, here’s what history says will happen to the stock market
Short-term pain followed by some gains on the downside – that’s how history has handled oil price shocks, according to new data released by JPMorgan.
Going back to 1974, during periods when oil prices increased more than 100%, the average performance of the S&P 500 (^GSPC) was higher one month, three months, six months, and one year following the increase in crude (BZ=F) (chart below). The S&P 500 has averaged a 6% gain during oil price increases.
But don’t get too warm and don’t rush, JPMorgan warned.
“Obviously, if oil prices go up a lot from here — and the guidance for Gulf production goes to $120-$130 and that’s probably a lot higher than that makes sense — currencies should go down again,” said JPMorgan strategist Mislav Matejka.
Oil prices are likely to remain a major market driver in the near term.
Since the launch of Operation Epic Fury on Feb. 28, global energy markets experienced a “violence war premium” created by prices.
Oil prices, which had been around $72 per barrel before the US attacked Iran, rose quickly. The closure of the Strait of Hormuz has threatened 20% of the world’s supply. Brent crude briefly peaked at a staggering $119 per barrel in early March before settling in a volatile range.
As of today, oil is trading near $113 per barrel, an increase of nearly 60% in less than a month.
Read more: How the oil price shock feels in your wallet, from gas to groceries
Rising oil prices have begun to hit consumers’ wallets, as the average gas price across the country approaches $4 per gallon. The price of diesel has increased, putting pressure on the trucking industry.
“[Higher gas prices are] it’s gone down a lot in a short period of time,” former Trump manager Gary Cohn said of Yahoo Finance’s opening bid (video above).
“There is nothing faster for the consumer than standing there holding the gas nozzle and looking at the numbers on the tap,” he said. “And if they were paying $80 last week, and they’re paying $85 this week, and they were paying $60 last month, they know ‘I lost $20 in disposable income filling this tank of gas.’
Cohn added, “If you fill up four times a week, that’s $80 of disposable income out of your pocket after tax, disposable income. That’s the difference between taking your family out to dinner and not taking your family out to dinner a few times a week.”
Meanwhile, the S&P 500 (^GSPC) faced its most significant technical decline since early 2025.
After hitting an all-time high of 6,797 in January, the benchmark index hasn’t lost for four consecutive weeks, officially breaking below its 200-day moving average on March 19.
Currently trading at around 6,506, the S&P 500 is down about 6% from its record high. The sale reached market leaders such as the “Magnificent Seven” – for example, the shares of AI chip king Nvidia (NVDA) fell below an important 200-day average.
“Understand your risk tolerance and your ability to deal with these types of ups and downs and curveballs, because these are always going to happen,” said Edward Jones CEO Penny Pennington at the Opening Bid.
Brian Sozzi is the Editor-in-Chief of Yahoo Finance and a member of the Yahoo Finance editorial team. Follow Sozzi on X @BrianSozzi, Instagramagain LinkedIn. Tips for news? Email brian.sozzi@yahoofinance.com.
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