SPY Stock Forecast: How the Iran War Could Shake Up the S&P 500 Index

SPDR S&P 500 ETF (SPY) is becoming a barometer of geopolitical risks. The ETF fell about 0.5% amid concerns over U.S. and Israel airstrikes on Iran and tensions in the Strait of Hormuz. The sell-off was broad but selective, with energy stocks like ExxonMobil and defense contractors like Lockheed Martin soaring as “war winners,” while tech stocks and rate-sensitive growth stocks faced pressure. WTI crude oil prices surged over 6% to around $71 per barrel, heightening inflation worries. Traders are hedging, with the put/call ratio for SPY options rising above 1.2, but strategists note that markets have historically shown resilience to such shocks. The ETF’s next move depends on Iran’s response, the stability of the Strait of Hormuz, and whether oil prices stay below $80 or spike toward $100.