Mideast tensions in the past have moved markets, U.S. economy

White House confirms US responsible for strike that killed top Iran general

In an escalation of U.S.-Iran tensions, the U.S. has taken responsibility for airstrike on an Iraq airport that killed Iran’s top general Qassem Soleimani.

Investor’s Business Daily reported late Thursday night that the Dow Jones and NASDAQ futures fell as a result of rising tensions between the U.S. and Iran in the wake of a U.S. strike that killed Gen. Qassim Soleimani, head of Iran's elite Quds Force.

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Dow Jones futures fell 0.6 percent vs. fair value, erasing slim gains while the NASDAQ 100 futures lost 0.55 percent. However, it should be noted that overnight activity in the futures does not always translate to the next day’s trading activity.

OIL MARKETS WARILY EYE MIDEAST FOLLOWING U.S. AIRSTRIKE IN IRAQ

Military tension – especially those in the Middle East — have seen gyrations in the markets and the economy in the past.

Two weeks prior to Operation Desert Storm in 1991 with the threat of military action in the air, the S&P 500 fell nearly 5 percent. On Jan. 17, 1991 when the U.S. air campaign began the S&P went up 3.7 percent.

In this photo released by the official website of the office of the Iranian Presidency, President Hassan Rouhani waves to the crowd in a public gathering at the city of Yazd, some 410 miles (680 kilometers) southeast of the capital Tehran, Iran, Sund

Oil rose in the run-up to the Iraq War – nearly 40 percent from December 2002 to March 2003 – but on March 16th when President George W. Bush gave Saddam Hussein a final warning, oil prices fell 24 percent.

As recently as August of 2017, the Dow, S&P 500, Nasdaq logged their worst sessions of that year as saber-rattling between the U.S. and North Korea reached new heights when a North Korean army commander told state media that “sound dialogue” was not possible with President Trump and “only absolute force can work on him.”

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In a recent study, “Economic Consequences of War on the U.S. Economy,” The Institute for Economics and Peace an independent, non-partisan, non-profit research group analyzed major conflicts for the United States starting with World War II.

For the Afghanistan and Iraq Wars, the study reported, “This was also the first time in U.S. history where taxes were cut during a war which then resulted in both wars completely financed by deficit spending. A loose monetary policy was also implemented while interest rates were kept low and banking regulations were relaxed to stimulate the economy. All of these factors have contributed to the U.S. having severe unsustainable structural imbalances in its government finances.”

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