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This Day In Market History: Operation Desert Storm

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This Day In Market History: Operation Desert Storm
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Each day, Benzinga will take a look back at a notable market-related moment that happened on this date.

What Happened?

On this day 27 years ago, the Persian Gulf War began.

Where Was The Market?

The S&P 500 finished the day at 316.17, and the Dow Jones Industrial Average stood at 2,508.91.

What Else Was Going On In The World?

In 1991, wildfires in Oakland, California burned thousands of homes and resulted in 25 deaths. Boris Yeltsin became Russia’s first president elected by popular vote. The average U.S. income per year was $29,430.

Operation Desert Storm

The Gulf War began at 7 p.m. Eastern Time iwhen the U.S. military began bombing Baghdad and Kuwait as part of Operation Desert Storm.

The war in the Middle East certainly rattled U.S. financial markets. In the two weeks leading up to Congress’ authorization of Desert Storm, the S&P 500 tumbled nearly 5 percent and the price of oil jumped 12.5 percent. However, the day after the operation launched, investors regained their confidence in a major way. On Jan. 17, 1991, oil prices crashed 33 percent and the S&P 500 jumped 3.7 percent.

The U.S. military action came in response to Iraqi leader Saddam Hussein’s invasion of Kuwait in August 1990. After Hussein failed to comply with United Nations Security Council demands to withdraw from Kuwait, the U.S. military intervened.

The stock market turmoil, much like the war itself, was short-lived. Between the day the war started on Jan. 16 and the day the U.S. held its victory parade in Washington on June 8, the S&P 500 gained 20 percent and the Dow gained 18.6 percent.

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