Since the end of February, the three major stock market indices — the Standard & Poor’s 500, the Dow Jones industrials and the Nasdaq composite — have fallen by a few percentage points.

One might ask: That’s all? Doesn’t the market know there’s a war on?

Yes, the stock market knows. It just doesn’t care as much as you might think it should.

History tells us that we shouldn’t be all that surprised. Although geopolitical events like the launch of military actions tend to rattle the securities markets in the short term, investors eventually shift to the long view, assuming that these conflicts will eventually be resolved and the door reopened to bullish sentiment.

The major downturns of the past, such as the crashes of 1929, 2000 and 2008, have been caused less by external events than by business and investment internals, such as threats to economic structure — over-leveraging in the first, the dot-com crash in the second and the housing crash in the third. Those were genuine crashes, not short-term downturns.

The Iran war hasn’t yet taken on the coloration of an economic threat, although that bulks large on the horizon if the disruption of oil supplies created by the closing of the Strait of Hormuz continues or tightens or the Middle East energy infrastructure sustains more damage.

Indeed, two of the most severe downturns of recent times are associated with oil — the Arab oil embargo of 1973, following the Yom Kippur War, which brought the S&P 500 down by more than 16% over a period of about six weeks, and Iraq’s seizure of Kuwaiti oilfields in 1990, which caused a 16% drop in the S&P over about two months.

Let’s take a look at the condition of the stock market since the U.S. attacks on Iran began on Feb. 28, and then place it in the context of market behavior after other major events, dating back to the start of World War II.

From Feb. 28 through Thursday’s trading close, the S&P lost 4.31%, the Dow, 5.05% and the Nasdaq, 3.57%. Those declines feel ugly, in part because they’ve occurred over a short time frame of about five weeks. But in the grand scheme of things, they’re modest.

“It feels like this drawdown should be worse than this given everything going on in the world,” Ben Carlson of Ritholtz Wealth Management posted last week. But Carlson observed that 5% pullbacks are common, in good times and bad — only three years since 1990 have gone without one.

There were two each in 2023, 2024 and 2025, which all ultimately delivered double-digit S&P returns. None, obviously, came close to the 10% pullback known as a correction, which by Carlson’s reckoning occurs on average every 1.8 years.

The latest pullbacks have come with the stock market percolating along at historically generous valuations. This year, the S&P’s price-earnings multiple has hovered around 30x, well above its historical average of less than 20x. That alone should have had investors bracing for a reversal or even a correction.

When similar events occur during bull markets, external events are often a trigger rather than a cause. Investors look for reasons to take profits, even though the rationales may have nothing to do with the market action.

To place things in a longer perspective, let’s review how the stock market has reacted to great global events of the past. (Thanks to Ryan Detrick of the financial advisory firm Carson Group for compiling these statistics.)

The Pearl Harbor attack of Dec. 7, 1941, brought the S&P down by 11% over the following three months — but one year later the market was up by 4.3%. One month after Richard Nixon’s resignation on Aug. 9, 1974, the market was down by 14.4%; one year later it was up by 6.4%. The market entirely shrugged off the Cuban missile crisis, the Kennedy assassination, the Hamas attack on Israel on Oct. 7, 2023, and Russia’s 2014 annexation of Crimea and its 2022 invasion of Ukraine; none was associated with a market decline over the following month.

Even when events did precede a market decline, stocks often recovered within weeks or months. North Korea’s invasion of the South in 1950, launching the Korean War, took the market down 12.9% over the next two weeks, but as Kelly Bogdanova of RBC Wealth Management documents, it made up the loss over the next 56 trading days. Similarly, the Russian invasion of Ukraine in February 2022 is blamed for a 7.4% decline over the following two weeks, but the market broke even 27 trading days later.

Bogdanova notes that after the 1990 Kuwait invasion, which knocked the market down by 16% over seven weeks, the market didn’t break even for an additional four months. But that was oil talking.

The current market environment may be unique, because it’s entirely in the hands of one reckless individual. As the late Michael Metz of Oppenheimer & Co. taught me, 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. Consider how the market got whipsawed by his announcement of “Liberation Day” tariffs, a faux-protectionist stunt that took place on April 2, 2025, and therefore marked its one-year anniversary Thursday.

The draconian tariffs were announced, amended, partially withdrawn, reimposed, etc., etc., until investors got queasy on the merry-go-round. The Supreme Court finally put a stop to the shenanigans on Feb. 20.

One month after the initial announcement, investors still didn’t know what to make of it. The S&P was virtually flat, the Dow had lost 2.15% and the Nasdaq was up 2.1%. Since then, investors have learned enough about Trump’s decision-making to disregard the chatter. (This is the TACO trade, for “Trump Always Chickens Out,” in action.) As of Thursday, the S&P had gained 13.7% since Liberation Day, the Dow was up 9.1% and the Nasdaq was up 19.3%.

The Iran war is driving a whipsaw all its own. The market has been rising and falling in accordance with whether investors buy into Trump’s optimism or grow downcast at the absence of any endgame, a judgment that can change minute by minute. But it has remained in a tight range of 3 to 5 percentage points.

The latest week provides a good illustration: Tuesday saw shares turn in their best day in months, with the Dow gaining 1,125 points, or 2.49%, and the other indices roughly matching its performance.

But on Thursday, the stock index futures markets plummeted after Trump’s vacuous address to the nation, ostensibly due to disappointment that he didn’t provide an ending date or show that he knows what he’s doing. Yet investors didn’t show the same anxiety once trading started, sending the indices into a sort of fugue state. The S&P gained a meager 7.37 points, or 0.11%, the Dow lost 61.07 (0.13%) and the Nasdaq gained 38.23 points (0.18%), all on volume a fraction of what it has been in recent weeks. The trading range held.

It’s possible, of course, that the market will be stirred out of its slumber by a major development. A ceasefire, say, or something bad. Or that the Iran war will transition to a new phase that makes it resemble the oil embargos of the past rather than a transitory disruption of the status quo. We won’t know until it happens.

Until then, the average investor’s choice is between moving everything into cash, or strapping in for the ride.