As the Iran conflict moves into its second month, the headlines can feel heavy. But if history is any guide, markets have repeatedly shown remarkable resilience in the face of geopolitical uncertainty—and often emerge even stronger on the other side.

Looking back for perspective, two past conflicts stand out with very different backdrops:

In 1990, at the outset of the first Gulf War, the U.S. economy was already slipping into recession, with flat corporate profits, elevated inflation, and shaky consumer confidence. Markets initially struggled under that weight. Yet even then, stocks began recovering well before the fighting ended, quietly anticipating better times ahead.

By contrast, in 2003 when the Iraq War began, the economy had already healed from the dot-com bust. Corporate earnings were rebounding, policy support was in place, and valuations were attractive. Markets responded with optimism, launching a powerful five-year bull market that ran until 2007.

Today, we see threads of both periods—but the long-term outlook feels far more constructive. Importantly, we don’t see the current situation meaningfully impairing America’s economic foundation or corporate earnings power. A successful outcome that eliminates the Iranian regime would remove a dangerous, decades-long geopolitical risk, ultimately leading to a safer world, greater regional stability, and a more confident global market environment. In that light, today’s environment reminds us more of the resilient 2003 backdrop than the fragile one in 1990.

Of course, decisive military action against the regime comes with real challenges and a human cost. Yet these necessary steps to neutralize a long-standing threat—particularly Iran’s control over the Strait of Hormuz and its history of regional destabilization—are laying the groundwork for lasting peace and security. We believe this difficult but essential process will ultimately prove worthwhile.

Still, history reminds us that markets have a habit of looking past the fog of conflict and rewarding patience. We caught a glimpse of that potential with the strong gains on the last day of March, and we believe more clarity could bring even greater opportunity.

While the exact timing of resolution is uncertain, the underlying strength of the U.S. economy and the earnings power of American companies remain solidly intact. Once military objectives are achieved and commerce flows freely again through the Strait, we expect this period of volatility to give way to attractive buying opportunities.

For now, we continue to advise keeping your portfolio risk balanced at long-term targets and staying well diversified. For long-term investors, moments like these often plant the seeds for future growth.

We remain optimistic about the road ahead and are here to help you navigate it with confidence.

Warmest regards,

Adam Vartanyan, CFP®

Important Information

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change. References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

All data is provided as of March 31, 2026. All index data from FactSet. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. Past performance does not guarantee future results. Asset allocation does not ensure a profit or protect against a loss. This research material was prepared by LPL Financial, LLC.