By Lewis Krauskopf

NEW YORK (Reuters) – Worries over a potential Russian invasion into Ukraine could fuel stock weakness over the short-term, but most U.S. market fallout related to geopolitics is likely to be short-lived, if history is any guide.

With the S&P 500 down over 7% to start the year and bond yields spiking, concerns about a hawkish turn by the Federal Reserve in its fight against surging consumer prices stand to remain at the forefront of investors’ minds this year, even as developments overseas could rattle markets in the near term.

“The equity markets are more at risk from the fallout from the war on inflation than on a potential invasion of Ukraine,” Sam Stovall, chief investment strategist at CFRA, wrote in a note to investors.

Stocks have been hit in recent days and investors have rushed to safe-haven assets amid rising worries over a potential conflict in Eastern Europe. On Monday, the S&P 500 last was down 1% in choppy trading.

Past ructions from geopolitical events have been comparatively fleeting, CFRA’s research showed. The firm analyzed 24 events since World War II, finding the S&P 500 fell on average of 5.5% from peak to trough in the aftermath of those events.

The market took an average of 24 days from the start of the event to reach a bottom, but it recouped those losses in an average of 28 days later, according to Stovall.

Truist Advisory Services, meanwhile, reviewed 12 historical events, including the 2003 Iraq War, 1979 Iranian hostage crisis and the 1962 Cuban missile crisis. The S&P 500 was higher a year after those events in nine of the 12 times, with an average gain of 8.6% – perhaps not surprising for an index that has gained about 4,000% since 1980.

“When you look at the history of geopolitical events, they tend to have a short-term impact on the markets, and as long as they don’t drive you into recession, then the markets tend to rebound,” said Keith Lerner, the firm’s co-chief investment officer.

“The conclusion is that we don’t think investors should overreact to this situation by itself.”

Still, some on Wall Street worried the impact of a intensified Russia-Ukraine conflict could be longer lasting for some parts of the market.

David Kelly, chief global strategist at JPMorgan Funds, said a Russia invasion of Ukraine could be expected to drive up energy prices, while the prices of other commodities also could surge. Oil prices were at almost seven-year highs on Monday.

Higher energy prices were also on the mind of Morgan Stanley strategist Michael Wilson, who said a further spike could “destroy demand, in our view, and perhaps tip several economies into an outright recession.”

(Reporting by Lewis Krauskopf; Editing by Ira Iosebashvili and Nick Zieminski)