What’s Happened So Far
Since the US-Israel strikes on Iran began February 28, 2026:
- Dow Jones: Fell over 400 points on March 2, has been volatile since
- S&P 500: Down roughly 5-8% from pre-conflict levels
- Oil stocks (Exxon, Chevron): Up significantly as $110+ oil boosts profits
- Defense stocks (Lockheed Martin, Northrop Grumman): Up strongly
- Airlines: Down sharply due to higher jet fuel costs and route disruptions
- Consumer discretionary: Under pressure as inflation fears grow
Should I Sell Everything?
Almost certainly no. History shows that stock markets typically recover from geopolitical shocks within months. Here’s what past conflicts looked like:
- Gulf War (1991): Markets initially dropped, then rallied 25% over the next year
- Iraq War (2003): S&P 500 bottomed right as the war started, then rose 30%+
- Russia-Ukraine (2022): Markets dipped 10% then recovered within months
The pattern: markets hate uncertainty. Once the situation becomes clearer (even if still bad), markets typically stabilize and recover.
What About My 401(k)?
If you’re investing for retirement and that’s 10+ years away, the worst thing you can do is panic sell during a dip. You’d be locking in losses and missing the recovery.
If you’re close to retirement (within 5 years): Talk to a financial advisor about your allocation. You may want to ensure you have enough in bonds/cash to weather volatility.
What’s Doing Well Right Now
- Energy stocks (oil & gas companies)
- Defense contractors
- Gold and precious metals
- Treasury bonds (safe haven)
- Cybersecurity companies
What to Avoid
This is not financial advice, but sectors under the most pressure:
- Airlines and cruise lines
- Import-heavy retailers
- Companies with significant Middle East exposure