As investors consider a potential conflict between the United States and Iran, Bank of America is strategizing on how its assets have behaved in the wake of past geopolitical upheavals. In a note to clients on Friday, strategist Michael Hartnett looked at international crises from just before the outbreak of World War II to the Israel-Hamas war. From there, we analyzed the performance of each asset class three months after the onset of each shock. Stocks and bonds have been measured since 1939, but due to a lack of data, gold was measured from the Yom Kippur War in 1973 and oil from the overthrow of the Shah of Iran in 1979. Among major asset classes, oil led the way, posting a median gain of more than 18% in the three months after the geopolitical event. Oil prices rose more than 5% this week alone as investors priced in the growing possibility of military action in the Middle East. President Donald Trump said Friday that he is considering a limited military strike to pressure Iran over its nuclear program. On Thursday, President Trump said he would make a decision on attacking the Islamic Republic in the coming weeks, but left open the possibility of a deal. Meanwhile, the 2nd U.S. Carrier Strike Group, led by the aircraft carrier Gerald R. Ford, is sailing to join the aircraft carrier Abraham Lincoln, stationed in the Persian Gulf. Gold, long seen as a safe investment in times of geopolitical uncertainty, trailed oil with a median gain of about 6% in the first three months of the crisis. However, gold has evolved from a stable, low-drama trade to a more popular trade for retail investors these days. After 2025 saw precious metals prices register their biggest annual rise since 1979, this year has led to dramatic swings. Meanwhile, U.S. stocks rose less than 5% over the same period. In the shorter term, another report from Barclays found that the S&P 500 exhibits a modest uptrend in the days leading up to and on the day of major geopolitical events. On average, after such an incident, the overall market index ended the day little changed.
