Stocks Shrug Off Iran Conflict, Remain Resilient

Market volatility remains muted despite escalating geopolitical tensions

Apr. 3, 2026 at 8:58pm

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An extreme close-up of intricate, industrial-looking financial machinery and equipment, conveying a sense of the complex, powerful systems that underpin the global economy.The stock market's resilience in the face of the Iran conflict reflects investors' ability to look past short-term geopolitical shocks, though a prolonged crisis could still rattle the markets.Los Angeles Today

Despite the ongoing conflict with Iran, the major U.S. stock market indices have only seen modest declines of a few percentage points since late February. Experts say investors are taking a long-term view, recognizing that geopolitical events typically have short-term impacts on markets that eventually subside.

Why it matters

The relatively muted market reaction to the Iran conflict highlights how investors have become desensitized to geopolitical shocks in recent years. However, a prolonged disruption of oil supplies or further escalation of the conflict could pose a greater threat to the markets and the broader economy.

The details

Since the U.S. attacks on Iran began on February 28, the S&P 500 has lost 4.31%, the Dow Jones Industrial Average has fallen 5.05%, and the Nasdaq Composite has declined 3.57%. While these declines feel significant in the short term, they are relatively modest compared to historical market reactions to major geopolitical events. Experts note that 5% pullbacks are common, occurring on average every 1.8 years, and that the market often recovers within weeks or months.

  • The U.S. attacks on Iran began on February 28, 2026.
  • The market declines mentioned occurred through trading on April 3, 2026.

The players

Michael Hiltzik

A columnist for the Los Angeles Times who wrote the original article.

Ben Carlson

A financial analyst at Ritholtz Wealth Management who commented on the market's resilience.

Kelly Bogdanova

An analyst at RBC Wealth Management who has studied market reactions to geopolitical events.

Michael Metz

A late investment strategist at Oppenheimer & Co. who taught the author about the market's dislike of uncertainty.

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What they’re saying

“It feels like this drawdown should be worse than this given everything going on in the world.”

— Ben Carlson, Financial analyst, Ritholtz Wealth Management

“The stock market typically rises in times of economic growth and economic downturns, as long as investors know where things stand on the turn of the wheel. What they hate is uncertainty, and no one revels in squeezing uncertainty until it screams for mercy like Trump.”

— Michael Metz, Late investment strategist, Oppenheimer & Co.

What’s next

Investors will continue to monitor the situation in Iran, as a prolonged disruption of oil supplies or further escalation of the conflict could pose a greater threat to the markets and the broader economy. The market's reaction will likely depend on whether investors perceive the conflict as a temporary disruption or a more significant threat to economic stability.

The takeaway

The stock market's relatively muted reaction to the Iran conflict highlights investors' growing desensitization to geopolitical shocks in recent years. However, the market remains vulnerable to uncertainty, and a protracted crisis or major disruption to energy supplies could still trigger a more significant market downturn.