First of all, the US spent over two trillion dollars in Afghanistan. With their latest spending spree on domestic initiatives, this may not sound like a lot, but two trillion spent with what appears to be nothing gained, does have some impact.

As for the short term, markets are most affected in a negative manner by uncertainty. As you would expect, most major markets are down since the withdrawal. This is unlikely to change anytime soon as it appears the US government was taken off guard by the quickness that chaos hit Kabul. 

Along with the uncertainty on the ground in Afghanistan, world leaders are saying they are also in the dark on what is happening as the US president has been on vacation during most of this evacuation.

This could restart the war in the Middle East. While it is not for certain, if Americans are not evacuated safely, the US will have to react to this. It is not in the United States’ best interest as a world leader to allow US citizens to be detained or harmed. President Joe Biden already stated that US forces would stay after the 8/31 deadline if US citizens still remain in the area.

This is from Yahoo! Finance:

Investors, both foreign and local, will have little interest in the Afghan financial markets at the moment, and this would have both short and medium-term effects on the economy. If the Taliban remains in power, many investors will pull out of Afghanistan as they would not be sure of the working conditions under the new Islamic leadership.

No matter what your thoughts on the current administration, there is no doubt they were not prepared for this and markets will be shaky until there is some understanding of what the future holds for the area.

If you are a “Buy The Dip” kinda person, your opportunity may be coming.