War Times — ^DJI

Cumulative return around the start date of each conflict. T=0 = first trading day on or after the war's start date. Normalised to 100.

Maximum decline from peak within the event window after T=0.

The Wartime tool from SeasonAlpha examines how a stock index behaved around historical war, crisis and geopolitical events. It answers a factual question: how did the market move on average before, during and after such events? To do so, the tool places an event window around the start of each conflict and plots the normalized price path — from the World Wars through Korea, Vietnam, the Gulf and Iraq Wars to ongoing conflicts such as the war in Ukraine. It also compares war years with peace years and highlights the affected years in the annual returns. At a glance, you can see which pattern an index has historically shown around geopolitical shocks.

You read the event path along the event window's time axis: the point T=0 marks the first trading day on or after the start of the conflict, the run-up trading days lie to its left (T-1, T-2, …) and the run-down to its right (T+1, T+2, …). The curve starts at T=0 with a value of 100; any value above means an average recovery, any value below a decline relative to the event day. Several conflicts can be overlaid to spot commonalities and outliers. In addition, bar charts show the average return per conflict as well as the maximum drawdown — the deepest fall from an interim high within the window after T=0.

Methodologically, the tool works with normalized returns: every year and every event window begins computationally at 100, with daily returns compounding on top. It deliberately does not compare absolute price changes but percentage paths — only this makes conflicts from different decades and price levels comparable at all. The event window spans up to 250 trading days before and after T=0 by default and can be adjusted in the sidebar. For ongoing conflicts, the curve ends on the latest available trading day. From the war-years and peace-years groups, the tool also computes average return and win rate (the share of positive years). All values come exclusively from real historical price data of the selected ticker.

The Wartime tool is a statistical instrument for historical context, not investment advice and not a forecast. It treats geopolitical events purely factually and neutrally as time markers — it does not judge any parties to a conflict and makes no statement about future prices. Every war has its own economic, political and market-structural conditions; an average pattern from the past cannot be transferred to the next conflict. The sample is small, and individual outliers can strongly shape the average. Use the analysis as context for your own research, not as a sole basis for decisions. Past paths do not guarantee future results.

Frequently Asked Questions

Can the tool predict how the stock market reacts to a war? No. The Wartime tool is descriptive and looks strictly backward. It shows how an index moved on average around historical war and crisis events — not how it will react in the future. Every conflict has its own economic and geopolitical conditions, so no forecast can be derived.

What does the point T=0 mean in the event window? T=0 is the first trading day on or after the defined start date of a conflict. Before it lie the trading days T-1, T-2 and so on (run-up), after it T+1, T+2 and so on (run-down). The curve is normalized to 100 at T=0, so each conflict is comparable regardless of its absolute price level.

What data does the Wartime tool use? The tool uses exclusively historical price data of the selected index or ticker. Every year and every event window is normalized to 100, after which average curves, annual returns, win rate and maximum drawdown are computed. No news, fundamentals or external forecasts are involved.