What’s Changed?

What’s Changed?

Author: Fi Plan Partners March 9, 2026 Duration: 4:58

Oil Spikes and What They Historically Mean for Markets
One of the most immediate market reactions to geopolitical tension in the Middle East is the surge in oil prices. Since the current conflict began on February 28, crude oil has risen sharply, climbing roughly 18% within days and continuing to move higher as new developments unfold. While oil has surged, other areas that investors often expect to benefit during periods of uncertainty, such as gold, consumer staples, healthcare, and aerospace and defense, have not seen the same type of strength. In fact, several of these traditionally defensive sectors have declined during the same period. This unusual pattern highlights just how quickly market dynamics can shift during geopolitical events. To better understand the implications of a sudden oil spike, it is useful to look at historical data. When oil experiences a rapid five-day rate of change similar to what markets are seeing now, the S&P 500 has tended to show modest short-term weakness but stronger performance over longer periods. Historically, the market has averaged roughly a 1% decline one month after a sharp oil spike. Three months later, returns typically turn positive at about 1%, followed by gains of around 2.5% after six months. Over longer time frames, nine to twelve months, the market has historically delivered even stronger performance. Looking at median returns, which reduce the influence of outlier years like 2008, tells a similar story. Despite sudden jumps in energy prices, equities have generally performed well over time. This pattern suggests that while energy shocks can cause temporary disruptions, they have rarely led to sustained market weakness. Investors may simply need patience while markets digest the initial volatility.

How Markets Historically Respond to Geopolitical Events
Geopolitical conflicts often create immediate uncertainty in financial markets. The initial reaction is typically increased volatility and a short-term decline in stock prices as investors respond to rapidly evolving news. However, history shows that these events rarely lead to prolonged market downturns. Data examining major geopolitical events since 1941 reveals a consistent pattern. While markets may fall initially when conflict breaks out, the S&P 500 has historically recovered and produced positive returns over the following months. On average, the index has risen about 2.6% three months after major geopolitical events. Six months later, average gains increase to approximately 5.8%, and twelve months after the event, the average return rises to about 7.8%. Recent Middle East conflicts follow a similar pattern. In many cases, the market declined when the news first broke but was higher three, six, and twelve months later. Of course, every event occurs within a unique economic backdrop. Some geopolitical conflicts unfold during periods of economic weakness, while others occur when economic fundamentals remain strong. That broader environment can influence how quickly markets recover. For investors, the key takeaway is that while geopolitical events often create short-term volatility, long-term market performance tends to be driven by more fundamental factors such as corporate earnings and economic growth. Rising oil prices, for example, could influence consumer spending and corporate profitability, which are important drivers of stock prices over time.

Key Technical Levels to Watch
During periods of intense news flow and rapidly changing headlines, market technicals can provide valuable insight into investor sentiment and potential turning points. Price action often reveals how investors are collectively responding to uncertainty. When markets face heightened volatility, watching key support and resistance levels becomes especially important. For the S&P 500, one important level recently stood at 6,710. This area represented a key resistance point where buying pressure had previously helped support the market. If the index breaks below this level and closes beneath it, attention shifts to the next major support level. That next level sits near 6,582, which corresponds with the 200-day moving average. The 200-day moving average is one of the most widely followed technical indicators in the market. It represents the average price investors have paid for the index over the past 200 trading days. Because of this, it often acts as a psychological threshold where buyers and sellers reassess positions. If the market approaches that level, investors who previously purchased near that average price may choose to lock in profits or defend their positions by buying additional shares. This dynamic frequently creates support around the 200-day moving average. Importantly, the moving average is currently trending upward, which is typically viewed as a positive signal for the broader market trend. From a broader perspective, the current situation appears to be a market-driven event rather than a fundamental economic shift. When volatility is driven primarily by headlines rather than economic deterioration, technical indicators can help investors monitor how sentiment is evolving in real time.

Greg Powell, CIMA®
President and CEO
Wealth Consultant
Email Greg Powell here

Bobby Norman, CFP®, AIF®, CEPA®
Managing Director
Wealth Consultant
Email Bobby Norman here

Trey Booth, CFA®, AIF®
Chief Investment Officer
Wealth Consultant
Email Trey Booth here

Ty Miller, AIF®
Vice President
Wealth Consultant
Email Ty Miller here

 

Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

Economic forecasts set forth in this presentation may not develop as predicted.

No strategy can ensure success or protect against a loss.
Stock investing involves risk including potential loss of principal.

Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.

The post What’s Changed? first appeared on Fi Plan Partners.


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