Should You Sell Because of Iran? 95 Years of Data says, No.

Published: March 3, 2026 | Red Bank, NJ

TL;DR

The U.S. and Israel struck Iran on February 28, 2026, killing Supreme Leader Khamenei and 40+ senior officials. Stocks dipped, oil spiked, gold hit $5,400/oz. But 95 years of market data show that geopolitical crises produce buying opportunities—not reasons to sell. Manufacturing is expanding (ISM PMI 52.4), and the biggest risk to your portfolio is panic, not war.

• S&P 500 Monday (March 2): Down ~1.6% intraday, recovering to flat by close; Tuesday selling resumed [CNBC]
• Gold: Surged above $5,400/oz, near its January 29 record of $5,594 [CNBC]
• Historical pattern: Average S&P 500 drawdown after geopolitical shock is −4.7%; typical recovery in 42 days [LPL Research]
• ISM Manufacturing PMI (Feb 2026): 52.4—second straight expansion month [ISM]
• PPI warning: January core PPI hit 3.6% YoY; services inflation stuck in the low-to-mid 3% range [BLS]
• Yardeni’s read: Short-war scenario; geopolitical fear creates buying opportunities, not exit signals [Yardeni Research]

By David L. Berkowitz

Investor and Financial Advisor. Nearly 40 years of experience—from trading and research at a $250 million hedge fund to two decades as a portfolio manager. Now helping individuals and families become shareholders in great businesses through VAP Wealth Advisors.

Verify David’s credentials on FINRA BrokerCheck (CRD#: 1384375).

What happened with Iran this weekend?

On February 28, 2026, the United States and Israel launched coordinated strikes on Iran—codenamed Operation Epic Fury by the Pentagon and Operation Roaring Lion by Israel. The strikes killed Supreme Leader Ayatollah Ali Khamenei, along with at least 40 senior military and political officials, including the IRGC commander-in-chief, the defense minister, and the chief of staff of Iran’s armed forces [ Wikipedia].

Iran retaliated with missile and drone strikes against Israel, U.S. bases in Qatar and the Gulf states, and critical infrastructure across the region. Reports indicate Iran attempted to close the Strait of Hormuz, through which roughly 13 million barrels of oil pass daily [ CNBC]. Oil surged more than $5 per barrel. Gold shot above $5,400 per ounce. Defense stocks rallied.

This is real. The scale of the operation—over 1,200 bombs in 24 hours, B-2 stealth bombers striking fortified ballistic missile facilities—exceeds anything the U.S. has conducted in the Middle East since 2003.

How did the stock market respond to the Iran strikes?

Monday, March 3: The S&P 500 opened down more than 1.6%, with futures off 111 points. The Dow dropped 786 points. The Nasdaq fell 2.15%. The VIX spiked to 25.40 [ 24/7 Wall St.]. Oil climbed another $5 on Strait of Hormuz closure fears.

Monday’s close (March 3): The S&P 500 closed up 0.1%, recovering from its intraday low as dip buyers stepped in—the same pattern seen after nearly every major geopolitical event since World War II [ CNBC]. Defense stocks like Palantir (PLTR) jumped more than $6 to $143.

Steve Eisman, the investor behind “The Big Short,” told CNBC he would not change a single trade because of the conflict and called the long-term outlook “very, very positive” [ ].

What does 95 years of market data tell us about geopolitical crises?

Selling into geopolitical fear has been the wrong move almost every time since 1930. LPL Research studied two dozen geopolitical shocks going back to World War II and found the average one-day market decline is −1.1%, the average total drawdown is −4.7%, the market typically bottoms in 19 days, and losses are fully recovered in 42 days [ LPL Research].

Hartford Funds found that stocks delivered positive performance one year after the start of armed conflict 73% of the time [ Hartford Funds]. Carson Group studied 40 major geopolitical events over 85 years and found the S&P 500 lost a median of 0.9% in the first month but gained 3.4% in the following six months [ CNN].

S&P 500 performance after major geopolitical events

Sources: LPL Research, Hartford Funds, T. Rowe Price. *Monday, March 3, 2026. Past performance does not guarantee future results.

Ed Yardeni, president of Yardeni Research and one of the sharpest macro strategists working today, published a note in the days following the strikes reaffirming his “short-war” scenario. Yardeni has written that geopolitical crises going back to the Smoot-Hawley Tariff of 1930 have consistently created buying opportunities [ Yardeni Research]. He and his co-author, research associate Eric Wallerstein, made a broader observation: everyone now knows the historical pattern, so the size of the dip and the resulting opportunity shrinks with each event.

What is Ed Yardeni’s assessment of the Iran conflict?

Yardeni’s research team frames the situation as a likely short-duration event. Iran’s supreme leader is dead. At least 13 top defense and military officials were killed in the opening 24 hours. Iran’s foreign minister admitted that soldiers in the field have no command structure—they are following the last orders received before their commanders were killed [ Al Jazeera]. An interim leadership council has been activated, but the IRGC’s chain of command is fractured.

Yardeni connects the Iran action to a larger strategic goal: checking China. Iran and Venezuela are two of China’s major oil suppliers. The U.S. moved on Venezuela earlier in 2025, and the Iran strikes further reduce China’s energy leverage. Yardeni’s read: a stable Middle East lets the United States shift more military resources to the Pacific, making a Taiwan invasion harder for Beijing [ Yardeni QuickTakes].

For a long-term investor, the distinction matters. A short war followed by a more stable region is bullish for global equities. A wider conflict involving China is a different scenario. Yardeni, the market, and Polymarket odds are betting on the first outcome.

Is U.S. manufacturing recovering?

Yes. The ISM Manufacturing PMI came in at 52.4% for February 2026, following 52.6% in January. Any reading above 50 signals expansion. This was the second consecutive expansion month—but only the third in 40 months [ ISM].

ISM Manufacturing PMI sub-indexes: February 2026

Source: Institute for Supply Management, March 2, 2026.

New orders (55.8) and production (53.5) are expanding. Employment (48.8) remains below 50, indicating factories are producing more but have not fully ramped up hiring. The Prices Paid index surged to 70.5—the highest since June 2022—driven by increases in steel, aluminum, and tariff-related costs [ ISM]. For an investor building a portfolio around ownership of productive businesses, a manufacturing recovery broadens the earnings base beyond technology. That matters.

Is inflation still a problem for investors?

The January 2026 Producer Price Index came in hotter than expected. Core PPI (excluding food and energy) rose 0.8% month-over-month—nearly triple the 0.3% forecast—and 3.6% year-over-year. Headline PPI printed at 0.5% monthly and 2.9% annually [ BLS].

Both measures have stopped declining. The disinflation trend that ran through 2024 and much of 2025 has stalled. Most of the stickiness sits in services inflation. Super-core readings (services minus energy and housing) remain stuck in the low-to-mid 3% range.

Yardeni’s view: productivity gains should keep unit labor costs in check, gradually easing services inflation over time. Once the Iran conflict ends or de-escalates, he expects oil prices to fall, pulling headline numbers down. But in the near term, the PPI report makes Fed rate cuts less likely. The fed funds rate sits at 3.50–3.75%, and CME Group data shows 95.6% of market participants expect no change at the March meeting [ CME Group via LiteFinance].

Why did gold spike, and what does it signal?

Gold surged above $5,400 per ounce in the immediate aftermath of the strikes—near its January 29, 2026, all-time high of $5,594—before settling into the $5,100–$5,300 range [ CNBC]. Gold is already up roughly 23% year-to-date as of early March 2026.

J.P. Morgan forecasts gold reaching $6,300 by year-end 2026, supported by central bank purchases and sustained investor demand averaging 585 tonnes per quarter [ J.P. Morgan]. Gold’s role here is exactly what it should be in a diversified portfolio: a hedge against geopolitical uncertainty and a store of value when real yields compress.

What should retirement investors do right now?

The data across 95 years points to a consistent conclusion: selling into geopolitical fear destroys long-term returns. The right move, historically, has been to hold quality positions and, if cash is available, buy the dip.

That does not mean ignoring risk. Three things matter for your portfolio today:

• Cash reserves: If you have enough cash to cover 6–12 months of expenses, you can ride out short-term volatility without liquidating positions at a loss. If you don’t, that is the first problem to fix.
• Earnings breadth: Manufacturing expansion (ISM PMI 52.4) broadens the earnings base beyond tech. Portfolios concentrated entirely in mega-cap technology stocks carry more risk than those with exposure to industrials, health care, and consumer staples.
• Inflation exposure: Core PPI at 3.6% YoY means rate cuts are delayed. Floating-rate debt, energy positions, and companies with pricing power benefit. Long-duration bonds do not.

The biggest takeaway from following Yardeni’s work for 35 years: geopolitical fear makes people sell. History says that’s the wrong move. The right move is to own shares of productive businesses with management teams that think like owners—companies that compound through crises, not because of them.

Disclosures

This article is for informational purposes only and does not constitute investment advice, a recommendation, or a solicitation to buy or sell any security. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. The opinions expressed are those of the author and do not necessarily reflect the views of VAP Wealth Advisors. All data cited is believed to be from reliable sources but is not guaranteed for accuracy or completeness. Consult your financial advisor before making investment decisions.

Endnotes

1. Wikipedia, “2026 Israeli–United States strikes on Iran.” Comprehensive timeline and operational details of the February 28, 2026 strikes. https://en.wikipedia.org/wiki/2026_Israeli%E2%80%93United_States_strikes_on_Iran

2. CNBC, “S&P 500 closes flat, rebounding from lows.” Live market updates for March 3, 2026 including sector-level performance and oil price moves. https://www.cnbc.com/2026/03/01/stock-market-today-live-update.html

3. 24/7 Wall St., “Stock Market Live March 3, 2026.” Intraday futures data, VIX level, gold price, and Strait of Hormuz reporting. https://247wallst.com/investing/2026/03/03/stock-market-live-march-3-2026-sp-500-spy-down-big-on-iran-war-fears/

4. LPL Research, “Middle East Conflict: How Stocks React to Geopolitical Shock.” Analysis of two dozen geopolitical events since WWII: average drawdown −4.7%, recovery in 42 days. https://www.lpl.com/research/blog/middle-east-conflict-how-stocks-react-to-geopolitical-shock.html

5. Hartford Funds, “Military Conflicts May Rattle Markets, But Not for Long.” Stocks delivered positive returns one year after the start of armed conflict 73% of the time since WWII. https://www.hartfordfunds.com/practice-management/client-conversations/managing-volatility/military-conflicts-may-rattle-markets-but-not-for-long.html

6. CNN Business, “Why stocks are acting so weird about a spiraling war with Iran.” Carson Group data: S&P 500 down 0.9% avg. first month, up 3.4% at six months after 40 geopolitical events. https://www.cnn.com/2026/03/03/investing/us-stocks-iran-turmoil

7. ISM, “Manufacturing PMI at 52.4%; February 2026 ISM Manufacturing PMI Report.” Full sub-index data: New Orders 55.8, Production 53.5, Employment 48.8, Prices 70.5. https://www.prnewswire.com/news-releases/manufacturing-pmi-at-52-4-february-2026-ism-manufacturing-pmi-report-302699883.html

8. Bureau of Labor Statistics, “Producer Price Index — January 2026.” Core PPI +0.8% MoM, +3.6% YoY; headline PPI +0.5% MoM, +2.9% YoY. https://www.bls.gov/news.release/ppi.nr0.htm

9. Yardeni Research, Morning Briefing (March 2026). Ed Yardeni’s short-war scenario, geopolitical crisis history, China–Iran connection, and PPI analysis. https://yardeni.com/

10. CNBC, “Gold price jumps on Middle East turmoil.” Gold above $5,400/oz; J.P. Morgan $6,300 year-end target; advisor allocation guidance. https://www.cnbc.com/2026/03/02/gold-price-jumps-on-middle-east-turmoil-what-to-know-before-investing.html

11. J.P. Morgan Global Research, “Gold price predictions.” Forecast: $6,300/oz by Q4 2026; central bank demand ~585 tonnes/quarter. https://www.jpmorgan.com/insights/global-research/commodities/gold-prices

12. Al Jazeera, “Who are Iran’s senior figures killed in US-Israeli attacks?” Named list of 13+ senior Iranian officials killed, including IRGC commander and defense minister. https://www.aljazeera.com/news/2026/3/1/who-are-irans-senior-figures-killed-in-us-israeli-attacks

13. T. Rowe Price, “Does a geopolitical crisis equal a market crisis?” S&P 500 rebounded 28.96% in 12 months after start of Iraq War; pattern repeated across events. https://www.troweprice.com/en/us/insights/does-geopolitical-crisis-equal-market-crisis

David Berkowitz CIO

I’m Berk — Investor, Educator, and Owner. For 40 years I’ve helped families think like owners and invest in great companies. Earlier in my career I was head trader for a $250 million hedge fund, advised Fortune 500 boards and C-level executives and taught 10,000 of their employees at multi-billion-dollar companies, and trained non-financial employees in value-based management.

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