Iraq War Begins — March 20, 2003
The 'shock and awe' moment
The U.S. invasion of Iraq began on March 20, 2003. The S&P 500 had bottomed weeks earlier — the war actually marked the bottom of the dot-com bear market. The 12-month return from March 2003 was +35%.
| Date | 1M return | 1Y return | 5Y return |
|---|---|---|---|
| 2003-03-20 | +1.9% | +26.7% | +54.1% |
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.
Markets are forward-looking. By March 2003, the war was widely expected and priced in. The actual commencement removed uncertainty and allowed the market to rally.
The dot-com bear was ending because valuations had normalized and the economy was recovering. The Iraq war was a sideshow to the fundamental cycle — not a driver of it.
Investors who sold 'because of the war' missed the beginning of a 5-year bull market. Geopolitics creates volatility but rarely changes the direction of an economy.
A widely telegraphed war is largely in the price before the first strike — in 2003 the bear market bottomed weeks before the invasion began. If you are holding cash waiting for geopolitical clarity, consider that markets have historically re-rated on the removal of uncertainty, not the arrival of good news.