How wars affect the stock markets

Frankfurt. The Russian invasion of Ukraine hit the stock exchanges hard on Thursday, with the indices suffering heavy losses. At the same time, the terrifying images are a reminder that the financial markets have also had to survive serious political crises and wars in the past.

For example, one of the earliest confrontations between the US and Russia was the Cuban Missile Crisis in 1962, when Moscow attempted to mount a missile threat to Washington on the island. At that time, the Dow Jones index collapsed sharply for a short time, but then recovered relatively quickly. In the end there was a plus of 24 percent.

But it can also be very different. The Vietnam War and the Second Gulf War showed that. Looking at the historical trends in the index, one can see that the effects of armed conflicts are relatively weak when they are short-lived or temporary, such as the so-called Third Gulf War in 2003.