07 MAY 2026
The Gulf conflict has birthed the third major global supply shock of the 2020s, following the Covid disruption and last year’s tariff war.
Historically, such events may have been enough to derail risk assets for a prolonged period. Yet markets continue to bounce back strongly.
This chart highlights the parallels to the 2025’s first half sell-off.
This time last year, global stock markets were experiencing a 15-20% correction (blue line), before a strong second half saw them finish with big gains for the year.
The S&P 500 is tracking a similar path in 2026 (red line) with the late Q1 drawdown being more than offset by April’s impressive rebound.
There are good reasons for this resilience; strong corporate earnings, supportive liquidity conditions and many investors remain under-positioned after multiple macro scares.
Bearish headlines still dominate sentiment, but price action tells a more constructive story.
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Despite the Gulf conflict, equity markets hold firm echoing last year's H1 sell-off and recovery
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