In the aftermath of a catastrophic terror incident, severe, negative effects can undermine economies, financial markets, labor, companies and individual investors. Stock markets often decline – sometimes sharply – although some equities, from defense to gold companies, may, at least initially, spike upward. Stock markets ultimately recover – whether within days, weeks or months – depending on many factors, including some that have nothing to do with terrorism.
Currencies in the country directly affected by the terror attack tend to weaken vis-à-vis hard currencies. Oil prices may rise sharply following a major terror attack, as was in the case immediately after Sept. 11 and March 11 Madrid train bombings. Similar scenarios are likely to occur in stock, currency and commodity markets should another major terror attack take place.