During times of war, investors typically move their capital from risky assets (like equities) to safer assets (like gold, US Treasury bonds, and other government securities).
This causes fluctuations in the value of both risky and safe-haven assets.
Stocks often experience significant declines as investors fear the impact on global supply chains, trade, and economic growth. However, we’ve yet to see that in the US markets—quite the opposite.
Having said that, companies in the defence sector or those supplying military equipment often see their stock prices rise during wartime due to increased government spending on defence.
Wars, particularly in regions like the Middle East, tend to increase oil prices due to supply disruptions and fears of future shortages. As oil is a critical global commodity, these price spikes can lead to increased inflation worldwide, impacting various sectors and asset classes.
Hope that helps a little?
