Crude oil surged near-2 percent on Wednesday, to a level it had not touched since December 2014, and the energy sector moved higher even as the stock market fell.
The moves came after President Donald Trump tweeted a threat about the U.S. military launching missiles strikes against Syria. All the S&P 500 sectors closed lower on Wednesday except for energy.
The Select Sector Energy SPDR (XLE) ended the day 1 percent higher. But if the U.S. actually follows through on Trump's threat, history shows the rally in oil and energy may not last.
Geopolitical tensions have historically lifted energy sector stocks and defense and aerospace stocks. But history also shows that actual military action has been followed by underperformance from the energy sector relative to other sectors of the U.S. stock market and the S&P 500.
Data from hedge fund analytical tool Kensho that examined patterns coinciding with U.S. military actions in the Middle East dating back to the 1990s show that in the day, week and month after a Mideast strike, oil has underperformed other assets, and the energy sector has been one of the worst in the S&P 500.