Figures updated · Text reviewed · By the Riftrate team · How the index is built
Which markets react, and why
- Oil reacts to wars in or near producing regions and shipping routes: the Gulf, Russia, the Red Sea. The attack on Saudi oil facilities in 2019 is the clearest case.
- Safe-haven currencies, the Swiss franc and the Japanese yen, have a reputation for strengthening when investors are worried, but after recent wars they often weakened against the dollar.
- US Treasury yields often fall as investors buy government bonds for safety.
- The US dollar is a safe haven too, and a war that pushes up oil prices or US interest rates can strengthen it further. Since 2018, the most consistent safe haven after wars in Riftrate’s data has been the US dollar.
- The currency of the country at war usually weakens, when it trades freely.
How often each safe haven actually rose is measured in safe-haven assets in a crisis, and the oil case in how wars affect oil prices. Each market has a page with every event: Brent oil, Swiss franc, Japanese yen, US 10-year yield, US dollar.
What happens to stocks during a war?
Over long wars, US stocks have historically done better than many investors expect. A study of US market returns during the Second World War, the Korean War, the Vietnam War and the Gulf War found that stocks generally beat their long-term average with lower volatility, Vietnam being the exception (Mark Armbruster, CFA Institute). The first days of a crisis are another story: fear can hit stocks hard before the economic effects are known.
Riftrate does not publish stock indices, which are licensed, but it tracks stock-market stress through the public OFR Financial Stress Index.
Correlation is not causation
Week by week since 2018, changes in Riftrate and in oil show a correlation of +0.17. That alone proves nothing: oil also moves with OPEC decisions and the economy. The stronger test is the date: when oil jumps on the day of an unexpected attack, far outside its normal range, the attack is the most likely cause. Every event in the library carries a “how unusual” score for that reason. The use-cases page explains the three tests in detail.
What history suggests
Market shocks from wars are often short. In many of the crises in the library, oil and safe havens gave back most of their first move within a few weeks, unless the war durably cut supply, as after the Russian invasion of Ukraine in 2022 and the Iran war in 2026. Past moves do not predict the next crisis.
Frequently asked questions
Does gold go up during wars?
Gold is often bought as a safe haven, and research finds a short-lived safe-haven effect, but its reference price data is licensed and not used by Riftrate. See safe-haven assets in a crisis for the Swiss franc, the yen, Treasuries and the dollar.
Do stocks go down when a war starts?
Often in the first days, when uncertainty is highest. Over the full length of past US wars, stocks generally did better than their long-term average, according to the CFA Institute study cited above. Past data is not a forecast.
Why did markets barely move after some wars?
Because markets react to surprises and to economic consequences. A war that was expected, or far from oil and trade routes, may change little for prices even when it is tragic for the people involved.
Can Riftrate predict market crashes?
No. It measures world tension in the news. A rising Riftrate says the world is tenser than usual, not what any market will do next.
Is this investment advice?
No. These pages describe the past.