Historical data spanning 40 years shows the S&P 500 has returned an average of 24% in the 12 months following a 2-day oil price spike of 20% or more. In 6 out of 7 instances since 1986, the stock index closed higher one year after such an oil shock occurred. The pattern suggests that sharp energy price increases, while volatile in the short term, have not typically resulted in prolonged market declines.
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