Deutsche Bank’s Henry Allen argues that the S&P 500’s modest pullback versus past Oil shocks reflects markets pricing a short conflict, resilient macro data and still‑dovish central banks. He notes the index is only 5–6% below record highs and highlights historical episodes, including 1979–80, 1990–91 and 2022, where S&P 500 drawdowns were followed by relatively swift recoveries.

Equities hold up versus past oil shocks

"For now, risk assets are still holding up much better than in history’s recent oil shocks."

"S&P 500 and Europe’s STOXX 600 are “only” 5-6% beneath their record highs."

"For example, the US jobs report for March, the first covering the period since the strikes began on Feb 28, had nonfarm payrolls up by +178k, the strongest in 15 months, with unemployment ticking down to 4.3%."

"In 1979-80, after the second oil shock, there was market turbulence as Paul Volcker hiked rates aggressively and a US recession took place in early 1980."

"Even in 2022, which was a more significant bear market as global central banks hiked rates aggressively, that was followed by a strong recovery in 2023, with the S&P 500 at a new record by early 2024."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)