US Stocks Fall Just 4% Amid Iran War, Outperform Global Markets As Europe Drops 9% And Japan Over 12%

US stock markets have performed better than global peers during the ongoing Iran conflict, as per a Reuters report. The benchmark S&P 500 has declined about 4 percent since late February. In comparison, Europe’s STOXX 600 has dropped 9 percent, while Japan’s Nikkei has fallen over 12 percent, highlighting sharper global losses.

Why US Is Holding Up Better?

Experts say the US economy is less dependent on oil compared to many other countries, as per Reuters report citing market strategists. Oil prices have risen over 30 percent due to the conflict, but the US is now a major oil producer and exporter. Only 4–8 percent of US oil passes through the Strait of Hormuz, reducing risk, according to BlackRock Investment Institute cited by Reuters.

Also, the US economy relies more on services than manufacturing, making it less sensitive to energy shocks. Compared to 1980, the US now uses 70 percent less oil to produce the same GDP, Reuters reported citing Morgan Stanley.

Tech Stocks Offer Stability

Technology stocks are another key reason for US resilience, as per Reuters report. They make up about one-third of the S&P 500 and have fallen less than 2 percent during the conflict. Analysts say tech companies are less affected by oil price swings, helping limit overall market losses.

Strong Dollar Adds Support

The US dollar has strengthened about 1.5 percent during the crisis, as per Reuters report. Investors see the dollar as a safe-haven asset in uncertain times. This has supported US equities while investors reduced exposure to non-dollar assets, Reuters said citing investment managers.

Risks If War Continues

Despite better performance, US stocks are still under pressure. Experts warned, as per Reuters report, that if the conflict continues, markets could face deeper declines. A prolonged war may trigger stagflation — high inflation with slow growth — which can hurt equities.

Global Markets May Rebound Later

Before the conflict, international markets, especially in Europe, were performing strongly due to lower valuations and improving earnings, as per Reuters report citing analysts. If tensions ease quickly, global stocks could regain strength and outperform again.

Outlook Remains Uncertain

Markets remain highly sensitive to geopolitical developments. Any positive or negative news can move stocks sharply, as per Reuters report. While US markets are currently more stable, experts say the situation remains fluid.