Wars reshape stock markets through exchange rates and interest rates, not just company earnings. The Russia-Ukraine war devalued the ruble; the same pattern predicted the Israeli shekel would fall then recover during the Gaza conflict. Historical analogues help investors anticipate market moves before black-swan events like 2008 hit.
Not only the company news, PRs, and updates affect the stock price. Another major factor we need to take into consideration is macroeconomic events. These are broad factors that affect the economy as a whole and affect the stock price. These factors may or may not be external to a country and are oftentimes man-made. They have the potential to change the course of the economy and the stock market. Some examples of these macroeconomic events are natural disasters like earthquakes, tsunamis, tornadoes, and you name it. Therefore, it's important to understand these events and their effect on the economy. So what is affected by these events? Exchange rate: the value of the currency is usually heavily affected by these events, as more investors will look to buy or sell the country's currency, which will affect its price. Of course, it depends on the event. Interest rates: sometimes because of these events, the central bank of the specific country will need to raise or lower the interest rate of the country. GDP: the higher the GDP, the better the economy is overall. This doesn't really affect the market too much, to be honest. Other events can be Fed rate hikes, CPI, PPI, war— hell, even when Jerome Powell speaks, the market moves and fluctuates like crazy. The main thing to look for when these events happen is to look for past similar events and what happened during those times, as the market tends to react similar and repeat itself. One of the best examples you can take is the Russia-Ukraine war. Based on that, I was able to make a good trade on the ILS/USD. Is the Israeli shekel. When the war started in Israel, there was a lot of fear and uncertainty, which usually causes the currency of the same country to go down. I looked at what happened in the Ukraine-Russia war to the ruble, and based on that, I saw that in the first 1-2 weeks of a war, the currency gets devalued, but then bounces back up. Black Swan Events: A black swan is an unexpected event with a huge impact. Oftentimes, it's logically explained only after it occurs. For example, the 2008 financial crisis was a black swan. The writing was on the wall, but no one expected it to actually happen, and in that magnitude as well. To sum things up, just like different things can change the amount of fun you have with your toys, the same applies to the market. So an investor that wants to have a good time in the market and make money needs to take these things into consideration.
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