We're following up a question we first asked a little over a month ago: Which market event is bigger: the DeepSeek AI Shock or the Iran War event?"
Here's where the S&P 500 (Index: SPX) was at the time we asked the question:
The United States initiated Operation Epic Fury against the Islamic Republic of Iran on Saturday, 28 February 2026. The S&P 500 (Index: SPX) had closed its trading week the day before, ending at a value of 6,878.88. Through the close of trading on 30 March 2026 the index has dropped 535.16 points, or about 7.8% of its pre-geopolitical event level.
As major events go in the U.S. stock market, at this point in time, the impact of the Iran war is a little smaller in magnitude than 2025's DeepSeek AI shock that sent the S&P 500 crashing between 19 February 2025 and 13 March 2025.
A little over a month later, we now have a definitive answer. The DeepSeek AI Shock was the bigger market-shaking event.
That's because 30 March 2026 turned out to be the bottom of the Iran War geopolitical event as measured by stock prices. The S&P 500 has since proceeded to charge higher, reaching new record highs. It has even regained its relative position above its current long-running trend with respect to its underlying trailing year dividends per share, as can be seen in the following chart:
When we asked the question after the close of trading on 30 March 2026, it looked like the Iran War geopolitical event could become larger in magnitude than the DeekSeek AI Shock. But as we can now show, it did not. The Iran War event is smaller in magnitude than the DeepSeek AI Shock. And it is much smaller in its impact than the combination one-two punch of 2025's DeepSeek AI shock and the "Liberation Day" global tariff event.
Maybe we should have proposed the question to one of the prediction markets so readers could have wagered on the potential outcome.