An almost 8% fall in the S&P 500, followed by a more than 12% rebound within two weeks, shows why selling after the Iran war cost some investors materially. The index dropped between 27 February and 30 March and then climbed to a new high by 13 April. Markets slipped again on 23 April as hopes of a quick diplomatic resolution dimmed; oil traded near $100 a barrel and fresh geopolitical incidents kept traders nervous.

Market swings in plain numbers - Between 27 February and 30 March the S&P 500 dropped almost 8%. - From 30 March to 13 April the index climbed more than 12% and hit a new all‑time high. - On 23 April the major US indices slipped again: the Dow fell 179.71 points, the S&P lost 29.50 points and the Nasdaq dropped 219.06 points. Those three figures show how large falls and recoveries can occur in quick succession. Vanguard research cited in an investing note underscores this volatility: 10 of the S&P 500's best 20 days occurred in years that finished with negative returns, and 11 of the worst 20 days happened in years that ended up positive. What drove the sell‑offs — and the rebounds - Geopolitical incidents: reports that Iran tightened control over the Strait of Hormuz, footage released by Tehran claiming seizure of a cargo ship, and air‑defence activations after small drone activity all raised uncertainty. - Political signals: Iran's Parliament Speaker Mohammad Bagher Ghalibaf resigned from the negotiating team, which markets read as reducing the chance of a swift diplomatic settlement. - Energy impact: those incidents pushed oil toward $100 a barrel, raising concern about renewed inflation pressures and complicating central bankers' interest‑rate decisions. - Corporate earnings: a majority of companies reporting through the morning of 23 April beat analyst expectations, and stronger earnings helped fuel the rally from the March low into April's high. Why selling can cost more than it saves - Selling in response to headline shocks is easy; getting back in at the right time is difficult. - Some of the market's best single trading days can arrive amid extended losses, so missing rebound days can materially reduce long‑term returns. - Market participants — both professional and retail — used the conflict as a reason to trim exposure. Jay Hatfield, chief executive and chief investment officer of Infrastructure Capital Advisors in New York, said many people are "using the war as an excuse" to reduce positions after a big run in markets, which can set the scene for bounces when sellers step aside. Economic context beyond headlines - Macro data has been mixed: weekly initial jobless claims rose only marginally in recent data, and S&P Global's flash US Composite PMI showed mixed results, indicating uneven fundamentals that have not uniformly weakened markets.

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"We're playing musical chairs between earnings season and these war headlines that aren't likely to be that great," said Jay Hatfield, chief executive and chief investment officer of Infrastructure Capital Advisors in New York.

This article was created with AI assistance.