Purpose This research aims to examine how the US stock market responded to two recent geopolitical conflicts the Russia–Ukraine war and the Israel–Hamas war within the framework of market efficiency theory. By analyzing stock returns and abnormal market behavior surrounding these events, the study evaluates whether the market efficiently processed war-related information and whether any persistent anomalies emerged across firms and sectors. Design/methodology/approach We applied an event study methodology using daily stock returns of US-listed firms from April 16, 2021, to April 18, 2024. Market reactions to the Russia–Ukraine and Israel–Hamas conflicts are examined using both long and short event windows. Expected returns are estimated using a GARCH model with a time-varying beta and a varying-event specification, allowing volatility and systematic risk to adjust dynamically during periods of geopolitical uncertainty. This approach relaxes the assumption of stable pre-event parameters and is complemented by robustness checks using conventional market models, non-parametric tests, and alternative event windows. Findings Our empirical results have shown that the Russo-Ukrainian war affected some stocks returns positively and others negatively. In contrast, the Israel-Hamas War showed no statistically significant effect on stock prices. When comparing abnormal returns between event and non-event periods, we find no substantial changes attributable to either conflict. These findings suggest that, despite geopolitical instability, the US stock market demonstrates resilience with no significant impact on stock returns overall face to wars and supports the validity of the market efficiency theory. Practical implications Our findings is useful for investors, analysts and policymakers in understanding market behavior during geopolitical crises. Investors may consider reallocating assets toward defensive stocks such as consumer staples and healthcare during periods of geopolitical uncertainty. Conversely, technology stocks may be more vulnerable due to increased cybersecurity risks and operational costs. For financial analysts, understanding the asymmetric impact of geopolitical events across sectors can support better risk-adjusted portfolio construction. Nonetheless, policymakers should remain vigilant about sector-specific vulnerabilities (e.g. energy dependence or cyber infrastructure) and consider proactive measures to enhance market stability. Originality/value The literature reveals two key gaps. First, most event studies have emphasized the regional markets and no study offers a systematic side-by-side comparison of the US equity market’s reaction to different modern geopolitical conflicts within a unified empirical framework. Second, most research focuses on short-term reactions, overlooking the persistence of abnormal returns and systematic risk during prolonged conflicts. As the world’s largest and most globally integrated market, the USA provides an ideal setting to assess these issues. This study examines whether consecutive external wars are rapidly absorbed or generate temporary deviations from semi-strong efficiency, using a comparative cross-sectoral event-study approach.
Jardak et al. (Sat,) studied this question.