Why markets are relatively calm in the geopolitical storm
Investors as a group don’t act like individuals — their collective mind recognises risk as a historical constant. And the message the markets are sending now is that our worst fears will not come to pass.
The attacks this month on Israel have raised fears of a wider Middle East conflict, even of a third world war. Serious voices call this the most dangerous time in living memory, with threats looming from Russia, China, North Korea and Iran.
But financial markets have mostly been subdued in reaction to the conflagration brewing in Gaza. The benchmark US S&P 500 index has barely budged since the Hamas attack on October 7. Even stock markets closest to the battle zone, from Saudi Arabia to Egypt and the Gulf states, have experienced moderate pullbacks.
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Financial Times
Ruchir Sharma is a writer and investor, and the author of four books, including most recently "The 10 Rules of Successful Nations". He is chairman of Rockefeller International.
