Global events can have a significant impact on the stock market. Here are some ways in which global events can affect the stock market:

Economic growth or decline:

Changes in the economy, such as an economic slowdown or recession, can send ripples through the global economy and stock markets. Investors may become more risk-averse, causing stock prices to fall.

For example, the 2008 financial crisis, which was triggered by the subprime mortgage crisis in the United States, had a significant impact on global stock markets. it took two years for the markets to settle down and then go on the biggest bull run in stock market history.

Geopolitical events: Political events with global ramifications;

For example Brexit, impacted the stock market. The Brexit referendum in 2016 caused volatility in financial markets as investors grappled with the uncertainty surrounding the UK’s withdrawal from the European Union. Similarly, Russia’s 2022 invasion of Ukraine dramatically affected global markets and caused energy prices to spike, thereby hurting industries and consumers with energy-intensive costs. Now surely the rise of the Israeli -Palestine conflict one of the world’s longest continuing conflicts will create an unwarranted effect on the already unstable stock markets as we proceed forward.

Natural disasters and health crises:

Pandemics and other health crises can significantly affect the stock market. These things can make it hard for businesses to run, cause problems in the supply chain, and make people more risk-averse, leading to a decline in stock prices. For example, the COVID-19 pandemic in 2020 caused a significant decline in global stock markets. As we started to recover from this event geopolitical events started happening one on top of another, thus stalling the recovery of our biggest health crisis in 100 years.

Trade wars:

Trade wars occur when countries impose tariffs or other trade barriers on each other, leading to a decline in international trade. This can impact companies that rely on international trade, leading to a decline in the value of their stocks. We have witnessed this with sanctions being imposed on Russia for their invasion of the Ukraine. This has created an unstable Russian Ruble leading to a collapse in their Oil industry, creating a ripple effect world wide.

Interest rates:

Periodic adjustments of interest rates by the Bank of Canada or the Federal Reserve in the US to combat inflation can affect the stock market. When interest rates are raised, many investors sell or trade their higher risk stocks for safe investments such as bonds/cash if they believe that the market will run through a recession.

Social movements:

Social movements can also exert considerable influence on financial markets, especially in an era of heightened social awareness. Companies aligned with popular social causes, such as environmental movements and social justice, gain support and investment. Conversely, controversies and ethical concerns can lead to backlash, which affects stock prices and growth.

Therefore it’s important to note that global events can have both positive and negative impacts on the stock market. It just seems like this has become a monthly event for the world vs the stock market or is there now a more heightened awareness of world events around us. For those invested for the long term, the value of your assets will increase because a bear market is always followed by Bull – and for those looking for short-term gains in an ever fluctuating market it could be as easy as finding a needle in a haystack.