by Gary Alexander
June 24, 2025
It was on a sleepy Sunday morning 75-years ago, June 25, 1950, that North Korean troops stormed into South Korea, as the first “hot” war of the 45-year Cold War began. Stocks fell fast that last week of June, but then they took off over the remainder of that war. Something similar happened when The Great War was triggered by an assassination in Sarajevo this week, on June 28, 1914. Stocks fell, then rose strongly.
I’ll cover those stories in more detail later on, but most eyes are now on Israel vs. Iran, where hostilities broke out on Friday the 13th of June – an unlucky day for most of Iran’s nuclear scientists – and then the U.S. escalated those hostilities when President Trump decided to enter that foreign conflict on June 21st.
As the war in Iran escalates, we are also keenly aware that the Russia/Ukraine war is now 40-months old and entering a “battle of the drones” stage as Russia’s fourth summer assault commences. Beyond those two major conflicts, we are also enduring the most number of hot wars since the end of World War II.
According to the Peace Research Institute Oslo, 2024 set a new record of 61-conflicts across 36-countries. PRIO’s Conflict Trends: A Global Overview said 2024 broke the previous record of 59-conflicts in 34-countries during 2023 – with both years recording the most global conflicts in any year since 1946.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Africa is the most conflict-ridden region, with 28 state-based conflicts, nearly double the number from a decade ago. Asia had 17, and the Middle East had 10. Europe and the Americas had the remaining five.
The number of battle-related deaths reached 129,000 in both 2023 and 2024, according to PRIO’s report, tied for the fourth most deadly year since the Cold War ended in 1989. The highest 2024 death tolls were in the Ukraine war (76,000) and Gaza (26,000), with the remaining 27,000-deaths in 59 other conflicts.
PRIO Research Director and lead author of the report, Siri Aas Rustad, said, “This is not just a spike – it’s a structural shift. The world today is far more violent and far more fragmented than it was a decade ago.”
What’s most interesting to investors is that the S&P 500 rose strongly in both of those war-ridden years of 2023 and 2024, President Biden’s final two years in office. The S&P 500 gained 24% in both years, the strongest two-year market S&P rise since the late 1990s. NASDAQ staged an even more spectacular run, rising by 43.4% in 2023 and 30.8% in 2024, for an 87.6% two-year gain in those two blood-soaked years.
But gold did even better since the Middle East erupted in war. Since October 6, 2023, the day before Hamas invaded Israel, gold has outperformed stocks, virtually doubling the S&P 500 and NASDAQ.
Looking back further, we can see stocks tend to rise in times of war, but gold often rises even more, as a global crisis hedge. Measuring from the date when gold was free to move on global markets (1971), gold and silver reached their first peaks in early 1980, just after Russia invaded Afghanistan on December 27, 1979, and the metals rose again, 2001-11, beginning with America’s dual wars in Afghanistan and Iraq:
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Two Major Wars Began 75 and 111 Years Ago This Week — and the Market Mostly Rose
On June 25, 1950, at dawn on a Sunday morning, 200,000 North Korean troops stormed into South Korea. The next day, Monday, the Dow fell a staggering 4.7% (-10.44 points), to 213.91, the largest one-day drop since 1937, and the worst single-day decline we would see again until 1962. For the week of June 26-30, the Dow fell 15.24 points (-6.8%), to 209.11, the worst weekly drop since the 1930s.
On Thursday, June 29, 1950, President Truman declared a naval blockade of South Korea, and the Dow Jones index promptly fell by over eight points (-3.7%). Ironically, it was exactly one year earlier, on June 29, 1949, that the last U.S. forces were withdrawn from the South Korean peninsula. Only a skeleton 500-man military mission remained. A year later, of course, those troops, and more, returned to South Korea.
The stock market also reversed its direction in the second half of 1950, with the newly minted S&P 500 index rising 15.4% from June 30 to year-end, and +21.8% for the full year. Then, it just kept rising:
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
On June 28, 1914, World War I unofficially began when Archduke Franz Ferdinand, heir to the Austro-Hungarian empire, was shot to death, along with his wife Sophia, by a Serbian nationalist in Sarajevo, Bosnia. Ferdinand was inspecting his uncle’s imperial armed forces in Bosnia, despite death threats made by Serbian nationalists. When Serbian nationalist Nedjelko Cabrinovic threw a bomb at their car, Ferdinand managed to deflect the bomb onto the street, but many, including Sophie, were injured.
Ferdinand’s wounded entourage didn’t retreat. The Archduke and Sophie kept driving through Sarajevo’s streets. When their driver took a wrong turn onto a street named after his uncle, Emperor Franz Joseph, the car slowed to change directions and another Serbian nationalist, Gavrilo Princip, fired his pistol into the car, fatally wounding the Archduke and his wife. Austria-Hungary blamed the Serbian government for the attack, launching World War I during July, followed by the escalating “Guns of August.” So, you could call Gavrilo Princip the “Man of the 20th Century.” Without his lucky shot, perhaps no Great War, no Hitler, no Holocaust, no Atom Bomb. But we can’t live in that dreamland. All those events followed.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Markets were closed in America for the last five months of 1914, and for much longer in Europe, but the Dow Jones Industrials more than doubled from July 30, 1914 – when the U.S. market temporarily closed – to November 21, 1916, just after Woodrow Wilson was re-elected on a campaign of keeping American out of the Great War. The Dow had risen 110%, from 52.32 to 110.15. When America entered the war in 1917, the market trended down until the end of that year, losing 40%, but it gained back 85% from those lows by November 1919, setting a new all-time high near 120, despite the scourge of the Spanish flu.
We haven’t had enough time to weigh the outcome of the Iran/Israeli war, but as Jason Bodner showed us last week, the last few instances of violent eruptions there have been positive for the market…and gold.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Jason Bodner describes what happened next in the S&P above. Here’s how gold did: Gold was already in a major bull market in 2006, rising from $650 on July 12, 2006, to $1,000 by March 2008, but here are my calculations of how gold responded initially to the recent eruptions of violence in the Middle East:
War is indeed “hell,” as General W.T. Sherman said, but it is not the end of the world for investors.
All content above represents the opinion of Gary Alexander of Navellier & Associates, Inc.
Also In This Issue
A Look Ahead by Louis Navellier
The Fed Continues to Ignore Low Inflation – and a Weakening U.S. Economy
Income Mail by Bryan Perry
The Market Landscape Now Includes “Bunker Buster Bombs”
Growth Mail by Gary Alexander
How Do Markets React to the Outbreak of Major Wars?
Global Mail by Ivan Martchev
Should We Beware the Coming “Golden Cross”?
Sector Spotlight by Jason Bodner
Inside Our “Core Capsule,” the Market Weather is Beautiful
View Full Archive
Read Past Issues Here
About The Author
Gary Alexander
SENIOR EDITOR
Gary Alexander has been Senior Writer at Navellier since 2009. He edits Navellier’s weekly Marketmail and writes a weekly Growth Mail column, in which he uses market history to support the case for growth stocks. For the previous 20 years before joining Navellier, he was Senior Executive Editor at InvestorPlace Media (formerly Phillips Publishing), where he worked with several leading investment analysts, including Louis Navellier (since 1997), helping launch Louis Navellier’s Blue Chip Growth and Global Growth newsletters.
Prior to that, Gary edited Wealth Magazine and Gold Newsletter and wrote various investment research reports for Jefferson Financial in New Orleans in the 1980s. He began his financial newsletter career with KCI Communications in 1980, where he served as consulting editor for Personal Finance newsletter while serving as general manager of KCI’s Alexandria House book division. Before that, he covered the economics beat for news magazines. All content of “Growth Mail” represents the opinion of Gary Alexander
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