The stock market is starting to get desensitized to geopolitical tensions.
Global markets didn’t really react to India’s attack on Pakistan as tensions further flared between the two nuclear-armed countries.
“Even in this most tumultuous of environments, though, virtually no one had nuclear-armed India and Pakistan coming to literal blows on their Bingo card,” writes Ed Yardeni of Yardeni Research. “This isn’t just true of the folks in the trading pits in New York and London but also in Mumbai and Karachi.”
Yardeni points out that “IndiaPakistanWar” was trending on social media, adding to a growing list of geopolitical concerns for markets.
“Relations between New Delhi and Islamabad are never exactly calm,” Yardeni writes. “But India launching missile strikes on multiple targets in Pakistan raises the stakes for already jittery world markets. Targets included Pakistan-administered Kashmir, the site of last month’s militant attack on tourists in the Indian-controlled portion.”
On the flip side, such events make the U.S. and China’s trade tensions seem “less scary,” according to Yardeni. Stocks were mostly rising on Wednesday after the White House said U.S. and Chinese officials will meet over the weekend.
“Yet gold’s record-breaking rally looks less speculative by the moment as tensions flare up in every corner of the globe,” Yardeni writes.