When headlines scream “war in the Middle East” or “major powers on the brink,” investors' first instinct is often to panic. Oil prices spike, global leaders scramble, and the world holds its breath. But what does history tell us about how stock markets behave when major geopolitical crises hit—especially wars that could shake up global oil supplies or power balances? Let’s dig into the numbers and see what the past has to say. The results might surprise you. History’s Playbook: How SPY Reacted to Major Crises Here’s a look at how the S&P 500 ETF (SPY)—a popular proxy for the U.S. stock market—performed during some of the world’s most dramatic crises of the past few decades: Crisis Event Date of Crisis SPY Before SPY 5 Days Later Change (%) SPY 1 Month Later Change (%) Gulf War Begins (Iraq invades Kuwait) 02-Aug-90 $36.08 $33.81 -6.30% $33.00 ...
In recent years, the landscape of international finance has shifted dramatically. Traditional stalwarts of U.S. Treasury investments—major economic powers such as China, Germany, and Japan—have consistently reduced their holdings, prompting the U.S. government to look for alternative, reliable investors. Enter stablecoins: digital currencies designed specifically to maintain a steady value, increasingly stepping into this critical financial role, becoming major, unexpected buyers of U.S. government debt. A Changing Financial Landscape From 2018 through 2024, major global investors significantly altered their investment strategies regarding U.S. Treasuries: China , historically one of the largest holders of U.S. Treasuries, cut its holdings sharply from approximately $1.3 trillion down to about $800 billion by early 2025, driven by geopolitical tensions and strategic diversification. Germany , traditionally a strong ally and consistent investor in U.S. debt, reduced its holdi...