When bombs fall, the stock market shakes: How wars affect your money
- Jun 17
- 3 min read
Updated: 3 days ago
Wars affect people, countries, and realities, but they also shake the stock market. While news images are full of explosions, tanks, and streams of refugees, a different, quieter drama is unfolding on the financial markets, one that affects millions, even if they live thousands of kilometers away.
But why? What exactly is happening? And what does it mean for your money?
As soon as a conflict escalates, the markets often react within seconds and violently. Typical reactions:
📈 Price fluctuations explode:
Investors sell out of fear, others buy in the excitement of opportunity.
The markets are becoming a roller coaster.
🛡️ Capital flees to “safe havens”:
Gold, the US dollar, Swiss francs and government bonds are
suddenly in demand like never before.
🛢️ Commodity prices are skyrocketing:
Oil, gas, wheat: everything that could become scarce is rising.
📉 Regional stock markets crash:
When a country is directly affected, its currency, economy and confidence suffer.
But that's just the what. The more interesting question is: Why?
Why are the markets reacting so nervously?
1. Because uncertainty undermines trust
Investors want to be able to plan: profits, risks, returns. Wars destroy this predictability. No one knows what will happen tomorrow, and that makes markets extremely nervous.
2. Because money seeks protection
In crises, money often flows into assets considered stable, such as gold, government bonds, or strong currencies. This pattern is also evident in 2025, increasingly complemented by digital alternatives.
3. Because supply chains are in shambles
When pipelines burn or ports are blocked, it hits the global economy. Raw materials become scarce, production becomes more expensive, and prices rise. And that puts pressure on everything from the profits of large companies to the purchasing power of small households.
4. Because risk is reassessed
A country at war is a minefield for investors. Capital flows out, stock markets collapse, and the currency depreciates. Often, even the mere fear of escalation causes this.
💡 And what does that mean for you as an investor?
Suddenly diversification really matters
In theory, everyone knows the tip: diversify broadly! In practice, many end up holding too much tech, too much US, or too little commodities. In times of crisis, you realize how valuable true risk diversification is.
New winners emerge, but not without questions
Not every industry is suffering. Defense companies, energy suppliers, defense logistics, and cybersecurity can benefit. But these gains are often difficult to classify morally.
Emotions cost money, strategy brings peace
Those who sell in a panic lose. Those who stay informed can react.
Now is not the time for blind gambling, but for smart decisions with a cool head.
Conclusion: Markets react badly to uncertainty, but they quickly forget
Wars bring unrest, chaos, and fear. But markets are strange:
They react quickly, but often forget just as quickly. What seems like the beginning of the end today may already be priced in tomorrow. Therefore, as an investor, only one thing matters: understand what's happening.
And don't lose your nerve.
Event | Date | Break-in on day 1 | Total decline | Low point | Recreation |
Pearl Harbor attack | December 7, 1941 | -3.80% | -19.80% | 143 days | 307 days |
Assassination of John F. Kennedy | November 22, 1963 | -2.80% | -2.80% | 1 day | 1 day |
Invasion of Kuwait by Iraq | August 2, 1990 | -1.10% | -16.90% | 71 days | 189 days |
9/11 attack | September 11, 2001 | -4.90% | -11.60% | 11 days | 31 days |
Attacks in London | July 7, 2005 | +0.09% | 0.00% | 1 day | 4 days |
Boston Marathon attack | April 15, 2013 | -2.30% | -3.00% | 4 days | 15 days |
Russia - Ukraine war | February 17, 2022 | -2.10% | -6.80% | 13 days | 23 days |
Israel-Hamas war (beginning 2023) | October 9, 2023 | -0.30% | -4.50% | 14 days | 19 days |
