Markets now climb during wars and crises, which is unsettling because it means prices no longer track reality — they feed on the fear itself.

• When Russia invaded Ukraine and when the US-Iran fighting flared, stocks dropped at first, then quickly reversed and closed higher.
• Big hedge funds bet heavily that markets would fall, using borrowed money. When prices ticked up instead, they were forced to buy back in, driving prices higher in a "short squeeze."
• Automated trading programs pile on: once prices cross certain lines, the computers buy automatically, regardless of what's actually happening in the war.
• Same-day options bets have exploded, forcing the banks behind them to buy stocks as panic fades — turning fear into more buying.
• The scary part: the market rallied even though the Strait of Hormuz stayed frozen and shipping had collapsed to a fraction of normal. The good news was fake, but the machines bought anyway.

Outlook: This fear-eating system has recovered from every shock so far, but the open question is what happens the day a crisis is too big for it to absorb.