This chart is the S&P 500’s long walk through the 1973 to 1974 oil embargo shock, and the message is brutally simple. The first punch was obvious. The recovery was not.
The market started around 106.7, pushed to a peak near 110.9, then began slipping after the Yom Kippur War and the oil embargo. At first, investors could still pretend this was just another geopolitical scare. A little panic, a little selling, then maybe back to business. But the chart says otherwise. Even after the ceasefire, and even after the embargo was lifted in March 1974, the market kept bleeding lower. The trough came much later, near 62.5, showing that the real damage was not just the headline shock. It was the slow economic aftershock.
For commodities, this was a regime change. Oil stopped behaving like a boring input and became a geopolitical weapon. Energy prices fed into transport, manufacturing, food, mining, and almost every cost line in the economy. Inflation rose, profit margins got squeezed, consumers had less spending power, and central banks had to deal with a nasty mix of weak growth and high prices.
That is why commodity shocks matter so much. They do not just move oil charts. They rewrite the price of everything. Energy becomes the fuse, inflation becomes the fire, and equities are forced to pay the bill. This chart is not just about a bear market. It is about what happens when the commodity market grabs the steering wheel.
