The world is dangerous—a fact Americans were brutally reminded of on September 11, 2001. There are few times when you can honestly say, “It’s different this time,” but for Americans, something fundamental changed that day. We know thugs can reach us if they really want to.
The good news is, while thugs can be deadly, they haven’t taken down our vibrant economy or capital markets—and likely never will. How do you know? It would be hard for any future attack to match the pure shock value of September 11. Right now, most Americans would agree it’s not a matter of if we’re hit again, but when, and what it looks like. So to know the impact of the next major terrorist attack on US soil (or on our friends or interests abroad), think globally and check history.

Markets Globally Are Resilient

Stocks did fall big following the September 11, 2001, attacks. It’s not surprising—considering the scale and the utter first-time-surprise effect of that attack. The exchanges closed for days, and when they reopened on September 17, the S&P 500 fell -4.9 percent and kept falling the entire next week.1 US stocks were down -11.6 percent by September 21.2 But then they reversed course sharply. That’s about the size of a small but normal correction within a bull market. By October 11, stocks were back at September 10 levels, and they largely traded above there for months afterward.3 But this wasn’t a correction within a bull market. Those attacks came two-thirds ...

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