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Geopolitical Tensions Trigger Immediate Market Volatility
Wars, conflicts, and diplomatic breakdowns create uncertainty, leading to sharp equity swings and capital flight.
Geopolitical shocks act as immediate catalysts for market turbulence, often causing the VIX volatility index to spike by over 25% in a single trading session. When diplomacy fails, algorithmic trading systems trigger massive sell-offs as institutional investors de-risk.These sudden price swings are most intense in the first 48 hours following a conflict, as markets struggle to price in the uncertainty of future global escalations.