According to a recent research report from Deutsche Bank, as the situation with Iran continues to deteriorate, global equity markets are entering one of the most severe phases of geopolitically-driven sell-offs in history. The bank noted that since the late February joint U.S.-Israel airstrikes on Iran and the subsequent series of retaliatory actions, the S&P 500 index has declined by nearly 4% over just 13 trading days. By reviewing more than 30 major geopolitical shocks since 1939, Deutsche Bank found that U.S. stocks typically hit a cyclical bottom around 15 trading days after a conflict erupts, with an average decline slightly exceeding 4%. This indicates that the current market adjustment in both magnitude and pace closely aligns with historical patterns, suggesting the S&P 500 is entering a typical "bottoming window" driven by geopolitical risks.

Although short-term data points to an approaching bottom, the market must remain vigilant against potential unexpected pullbacks. Analysts at Deutsche Bank emphasized that while the average decline is around 4%, historical median data shows that maximum drawdowns triggered by geopolitical events often fluctuate between 6% and 8%. In extreme scenarios, if the conflict escalates further leading to complete supply chain disruptions, the decline could exceed average expectations. The market is currently in a highly sensitive period: on one hand, historical patterns provide psychological support, while on the other hand, the unpredictability of geopolitical risks remains a sword of Damocles hanging over the stock market.

The bank pointed out that this "average trajectory measured in days" differs from the maximum drawdowns typically seen in such events. Measured in calendar days, the trough usually occurs about three weeks after the initial shock, indicating the market is approaching a critical inflection point. Historically, recovery tends to emerge within weeks, with median data showing returns rebounding to pre-shock levels around the 34th day.

Meanwhile, the recent escalation of tensions in the Middle East has heightened uncertainty. Energy markets reacted strongly, with reports of significant damage to a major liquefied natural gas facility in Qatar causing sharp spikes in natural gas and oil prices. Deutsche Bank stated that a key question for investors is whether the worsening backdrop signals a deeper, more prolonged sell-off, or if the market is following a familiar geopolitical pattern.