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As the largest stock market in the world, the US market feels the first impact of any global events.
From trade wars to armed conflicts across the world can send shockwaves through Wall Street within hours.
The market reacts not only to global market events in US but also to how investors feel about what might happen next.
In this article, we’ll explore what is event in share market, how recent global events like the US-China trade war and, Russia-Ukraine conflict have impacted the US stock market. We will also explore the key global events investors should look for and strategies to navigate them.
What is Event in US Stock Market?
In the share market, an event refers to any occurrence- be it economical, political, corporate or geopolitical that has the potential to impact investor sentiment.
Events can be global or domestic, expected or unexpected, and positive or negative in nature.
Common types of events include quarterly corporate earnings release, economic data release, policy changes, natural disasters, and geopolitical tensions.
These events often lead to volatility in the share market. And, the impact depends on the scale and uncertainty surrounding the event.
How Global Markets Influence the US Stock Market?
Global market events in US can affect stock prices within minutes and often in unexpected ways. Because the US economy is deeply tied to global trade and the supply chain. Even the slightest change can trigger a market sell-off.
April 2, Liberation Day, announcements of tariffs led to a global stock market sell-off. The S&P 500 index plunged 9% during that week between 31st Mar to 4th April 2025 on the anticipation that the supply chain would be disrupted heavily. And, the tech-heavy Nasdaq 100 plunged 9.77%.
In 2022, Russia’s invasion of Ukraine sent oil prices above $120, fueling inflation. By June 2022, US inflation peaked at 9%.. The S&P 500 index closed nearly 18% lower during that year.
These examples show how the US stock prices are not just influenced by domestic factors, but also deeply sensitive to shifts in global politics and economics.
Major Global Events That Shaped Stock Markets
Throughout history, global market events in US have sent shockwaves, triggering sudden sell-offs, bear markets, and rapid rebounds.
Covid-19 Pandemic- 2020
The spread of the COVID-19 virus and the eventual shutdown of the global economy led to the fastest stock market crash in history.
The S&P 500 index lost 34% in just over a month. There was panic selling in stocks around the world.
Soon, aggressive government stimulus fueled a sharp recovery in markets. The S&P 500 index closed 18.4% and 28.71% higher in 2020 and 2021, respectively.
Brexit Referendum- 2016
Global markets fell sharply after Britain’s surprise vote to leave the European Union. After the vote, Dow Jones fell the most in five years. The S&P 500 and Nasdaq 100 indices fell 3.6% and 4.1%, respectively.
The US market stabilized within weeks, but the impact continued long after the initial shock.
Lehman Brothers Bankruptcy- 2008
When Lehman Brothers collapsed in September 2008, it triggered the worst financial crisis since the Great Depression. The S&P 500 index has lost nearly 57% of its value since its 2007 peak to March 2009 bottom.
The event led to sweeping changes in banking regulations and also had a lasting impact on investors’ sentiment.
September 11 Attacks- 2001
Following the attack, the markets were closed for a week. When trading resumed, the Dow Jones declined by 7.1%, its largest one-day point drop at the time.
Airlines and insurance sector stocks were the hardest hit. It took months for the market to recover losses.
Why Do Stock Markets Fall During Global Crises?
When a major global event unfolds, stock markets tend to react sharply. It’s not just due to panic selling or media hype. But the reason is deeper.
The core reason is that corporate earnings suffer, which is the foundation of stock valuations.
Earnings Expectations Drive Valuations
Stock price growth is based on what investors expect companies to earn in the future.
When a crisis unfolds, that expectation drops, and the stock loses the premium valuations it was trading.
If war disrupts the supply chain, or when the pandemic slows down spending, then businesses often earn less.
So, low earnings drive lower stock valuation, which leads to a fall in stock prices.
In March 2022, Adobe Inc. revised its earnings guidance downward due to the ongoing Russia-Ukraine conflict. The company anticipated lower revenue due to halting sales in Russia and Belarus. Adobe stock price fell 10% after the announcement.
This example shows how geopolitical events can directly or indirectly impact corporate earnings, leading to immediate stock price revaluation.
Profit Margin Shrink Under Stress
Crises often disrupt the supply chain and raise energy costs, which affects revenue growth.
In 2022, for example, inflation, triggered by the Russia-Ukraine war, pushed up the input costs across sectors. This impacted consumer spending. Retail giant Walmart lowered its full-year profit growth projections, predicting its adjusted Earnings Per Share to drop as much as 13%. Following the announcement, the stock price dropped over 9% in a single trading session.
Uncertainty Hurts Investment and Spending
When uncertainty rises, companies delay investments and consumers cut back on spending. This leads to a broader economic slowdown, which further reduces corporate earnings across sectors.
The recent developments around the tariff war have led to a sell-off in US equities. The primary reason for this sell-off is reduced earnings for corporations. A Goldman Sachs Research report estimated, S&P 500 earnings per share (EPS) might drop by 1% to 2% for every five percentage points that the US tariff rate is raised. This could be the reason for the stock market’s sharp reaction to the tariff-rate announcement on April 2, 2025.
Key Global Triggers US Investors Should Monitor
Apart from closely following corporate earnings and fundamentals, smart investors also focus on key global triggers:
Geopolitical Tensions: Wars or threats of war drive commodity prices and market fear, significantly changing market dynamics.
Central Bank Moves: Federal Reserve is one of the major global market events in the world. A single interest rate change or adverse commentary from the Federal Reserve, the Bank of Japan, or the European Central Bank can rattle global currencies and yields.
Consumer Price Index (CPI): It is the closely followed US economic indicator. CPI measures the changes in the price of a basket of goods and services that a household consumes. If CPI is higher than the previous readings, it indicates the economy is witnessing inflation.
Rising inflation often leads to interest rate hikes, which can reduce corporate earnings and pressure valuations.
Oil Price Shocks: For every $10 rise in crude oil prices, US inflation can climb 0.2% and set back economic growth by 0.1%, according to the Federal Reserve.
Health Crisis: The emergence of any new deadly virus is a real risk. It can impact investors’ sentiment, restrict travel, and slow economies worldwide.
Currency Volatility: A rising dollar is not good for any economy as it hurts exporters and affects the trade balance. Smart investors closely follow the Dollar Index (DXY) for signals.
Top 3 Factors That Amplify the Impact of Global Market Events in US Markets
Three factors that amplify the impact of global events in US markets:
Volatility Index: It represents the investors’ sentiment in the market. Are they fearful or greedy? A heightened level of fear can trigger a fast sell-off. The best way to measure investors’ sentiment in the market is by analyzing the Volatility Index (VIX).
For example, during the early COVID-19 pandemic, the CBOE VIX rose to 82.69, the highest ever level since the 2008 financial crisis.
Media Amplification: News of crisis or unrest can trigger sharp emotional responses, leading to overreactions. Social media and 24/7 further amplify the emotional responses of people, fueling volatility. For example: the 2021 Short Squeeze. In 2021, GameStop’s stock surged 1700% in just a few weeks because of a viral movement on Reddit. Mainstream media picked up the story, fueling more curiosity and trading volume. When valuations became unsustainable, operators created short positions, profiting from their fall.
Global Capital Flows: Institutional investors move billions of dollars across borders with just a click. This speed magnifies market reaction. Panic or optimism in one region can quickly ripple into US stocks.
Conclusion
Global market events in US- whether political, economic, or geopolitical don’t just make headlines, they move markets.
The impact can be sharp, but the market often recovers, sometimes faster than expected. For investors, understanding these connections is no longer optional. Tracking upcoming global market events, watching key indicators, and recognizing emotional overreactions can offer both protection and opportunity.
Historical data shows, while the market reacts sharply to global events, it also adapts and recovers quickly. Keeping a long-term focus and staying informed with upcoming events affecting stock market is important.
