# Wars, Geopolitical Crises and Stock Market Recoveries: What History Teaches Investors Stock markets have repeatedly faced wars, terrorist attacks, oil shocks, financial crises and pandemics. Yet, over time, many major equity markets have recovered and reached new highs. This resilience raises an important question: when a geopolitical crisis triggers a market correction, how long does recovery typically take, and what determines whether it happens within months or takes several years? The historical evidence suggests that markets often recover from geopolitical shocks, but the timing and extent of recovery depend on the nature of the crisis, its economic consequences and the valuations prevailing before the decline. ## 1. Geopolitical crises do not always produce prolonged bear markets During the Second World War, the Korean War, the Gulf War, the Iraq War and subsequent regional conflicts, financial markets experienced varying degrees of volatility. In many instances, equity markets...
