Since the war started, the S&P 500 is down only a smidge off its record high.

Why it matters: That may seem surprising, considering the roller coaster of market volatility we're riding, plus the sharp rise in oil and gas prices.

The big picture: Investors are only beginning to reckon with the potential fallout of a protracted conflict, with many still hanging on to hope that the Iran war will be short lived.

• "The U.S. administration could end military action at any point, which would likely sharply reduce the risk premium in prices," Goldman Sachs analysts wrote in a note Wednesday.

Driving the news: Beyond the wish for a quick resolution, investors appear to believe the U.S. is more resilient to an energy shock than other nations because it's a top oil producer.

• And the economy is less dependent on oil than it was in previous shocks.
• Finally, there's a recent vibe that U.S. equities are a safe haven, as investors have been cashing out of Asian and European stock markets, driving deeper losses in international stocks.

Where it stands: Some of that optimism is beginning to fade, especially after newly chosen Iranian leader Mojtaba Khamenei declared that the critical Strait of Hormuz should stay closed, and vowed revenge.

Zoom in: "The message is a substantial headwind for an investor community that had hoped the battle would end promptly," José Torres, senior economist at Interactive Brokers, said in commentary Thursday.

• "Negative impacts on corporate margins, inflation expectations, rate-cut prospects and yields are sparking market volatility, leaving participants with few places to hide."

Reality check: The effective closure of the Strait of Hormuz is shaping up to be the largest oil shock on record.

• Historically, long oil supply disruptions have driven stock prices down.
• And there are other worrying signs for markets, Jim McCormick, chief global macro strategist at Citi, tells Axios.
• "Banks are starting to write down growth forecasts, and you're looking at a daily news flow out of private credit that doesn't sound great."

Friction point: A sharp spike in geopolitical risk — as we're seeing now — can drive down investment, employment and stock returns, per a landmark study from economists at the Federal Reserve, published in 2022.

• They define geopolitical risk as "the threat, realization and escalation of adverse events associated with wars, terrorism and any tensions among states…that affect the peaceful courts of international relations."
• They measure it using a "geopolitical risk index" that essentially uses newspaper articles to evaluate wars, terror attacks and other volatile moments.
• Since 2000, the events that notched the highest risk scores have included 9/11, the Iraq war and the Russian invasion of Ukraine in 2022.
• Now, the geopolitical risk index appears close to that 2022 level.

By the numbers: The S&P 500 is down 3% from the start of the Iran war.

• Stocks reacted more violently to President Trump's "Liberation Day" last April, falling more than 10% the week of his announced tariff increases.

Flashback: In 20 major post-World War II military interventions, evaluated by analysts at RBC Wealth Management, the S&P 500 fell an average of "just" 6%.

• But market measures can hide a lot, and not all conflicts are the same.
• When energy supplies are at stake, the pain is more acute. In the 1970s energy crisis, and in the 1990 Gulf War, the S&P traded down by double digits.

Average tax refunds are up for Americans so far this tax season, but higher-income households are seeing the biggest boost over last year, according to internal Bank of America data.

Why it matters: It suggests the tax benefits from the One Big, Beautiful Bill Act are so far accruing to top earners.

• Tax refunds typically act as a little fiscal stimulus each spring, as Americans go out and spend their money.

By the numbers: Average tax refunds were up more than 10% from last year, among the top third of households, by income.

• They were up about 7% for the middle third, and slightly less than that for the bottom third, per data in a report from the Bank of America Institute.

The intrigue: Tax refunds so far are coming in lower than economists at Bank of America expected, per a separate report from its global research unit.

• They expected a 25% increase year over year, but right now it's about 10%. Instead of the seeing the bill impact refunds, tax payments are coming in lower, the economists said.

Reality check: There's another month till the filing deadline.

The Academy Awards are Sunday night, and we're keeping tabs on the race for best actor.

Why it matters: The movie industry may be in decline, but the Oscars still grab our attention.

Driving the news: Timothée Chalamet was the frontrunner in the race for his portrayal of the titular Marty in "Marty Supreme." But there's drama.

• On March 1, Michael B. Jordan pulled off a surprise win at the Actor Awards (formerly known as the SAG Awards) for his dual role as twins Smoke and Stack in Ryan Coogler's vampire thriller "Sinners."
• It came the day after he won an NAACP Image Award for outstanding actor. In an emotional moment, Jordan dedicated the trophy to the late Chadwick Boseman, his costar in "Black Panther."
• Now, Jordan has top odds to win the Oscar.

The big picture: Well, that is the question, after all. There are 10 nominees for best picture.

• Kalshi puts 76% odds on "One Battle After Another."

What to watch: There's a new category for best casting.