Nuclear Threat Scares — Composite Pattern
Cuban Missile Crisis (1962), India-Pakistan (1998), North Korea (2006-2017), Russia-Ukraine (2022)
Markets have never priced in actual nuclear conflict. During the Cuban Missile Crisis the Dow fell approximately 5.3%. North Korea conducted six nuclear tests — the largest US equity reaction was a brief 1% dip. When Putin placed nuclear forces on high alert in February 2022, the S&P 500 closed higher that day.
What history says
Editorial commentary written by ALAN analysts. Figures cited below are analyst-authored context — they are not derived from the chart above and may reflect different windows or sources.
The Cuban Missile Crisis drawdown of roughly 5.3% recovered within days. One year later, the Dow was up 27%.
The S&P 500's largest single-day reaction was approximately -1%. Every decline reversed within days.
If equity prices reflected even a small probability of nuclear exchange, no rational agent would hold long-duration assets.
Recognize what this history can and cannot say: markets structurally cannot price a nuclear exchange, so shallow drawdowns during these scares reflect functioning markets, not proof of safety. The actionable version is to manage the risks a portfolio can actually address — inflation, rates, concentration, cash for life needs — rather than trading headlines no asset allocation can insure.