Saddam Hussein invaded Kuwait on August 2, 1990. The S&P 500 fell 20% over the next 3 months as oil spiked to $41/barrel. The Gulf War began January 17, 1991 — and the market rallied immediately on the air war's start.
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ALAN IntelligenceData as of 2026-08-30
Bars: median S&P 500 forward return. Whiskers: 25th-75th percentile. n = 1 occurrences.
Based on 1 historical occurrences. Last triggered: 1990-08-02.
Past performance is not indicative of future results. This material is for informational and educational purposes only and does not constitute investment advice, an offer to buy or sell any security, or a recommendation. Data from publicly available sources believed to be reliable but not guaranteed. All investments involve risk, including possible loss of principal.
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ALAN GLOBAL INTELLIGENCE · alanglobalintelligence.comSource: S&P 500 daily closes · Generated 2026-08-30
Historical occurrencesshowing 1 of 1
Date
1M return
1Y return
5Y return
1990-08-02
-8.2%
+10.1%
+60.8%
What history says
Editorial commentary written by ALAN analysts. Figures cited below are analyst-authored context — they are not derived from the chart above and may reflect different windows or sources.
Markets declined on uncertainty, rallied on resolution
The 20% decline occurred during the uncertainty period (Will there be a war? Will oil stay high?). Once the war began and the outcome became clear, markets rallied immediately.
'Buy when there is blood in the streets' — literally
The market bottomed the week the air campaign began. Buying during peak geopolitical fear produced a +30% 12-month return from the October 1990 low.
Oil-driven recessions tend to be shallow
The 1990-91 recession was mild (GDP fell only 1.4%) because it was oil-driven rather than credit-driven. The economy recovered quickly once oil normalized.
For your portfolio
When an oil-supply shock hits, the durable portfolio question is energy and inflation exposure, not equity beta — the 1990 drawdown belonged to the uncertainty phase, and it resolved once the outcome clarified. Consider reviewing whether your allocation could tolerate a multi-month oil spike without forcing a sale near the low.
For information and research only. Not investment advice. ALAN does not place trades or execute orders. Figures come from the sources shown and can lag the market; verify independently before making decisions. Past performance is not predictive of future results.
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ALAN is not a broker-dealer or investment advisor. All data is informational only and does not constitute investment advice. Past performance does not guarantee future results.