The S & P 500 could go a few different paths next month, depending on how the U.S.-Iran war plays out, according to UBS. The stock market has struggled since the conflict broke out on Feb. 28, with investors worried that persistently high oil prices will drive up costs in the economy and dampen consumer spending. To try and gauge the effect on corporate profits, Wall Street has focused on evaluating how long the war might last and its likely global economic impact. The S & P 500 has dropped more than 5% in March, on track for its worst monthly performance in a year. That has also left the benchmark stock index negative for the year thus far. “March has been a challenging month for financial markets, in light of the conflict in the Middle East,” UBS chief economist Arend Kapteyn wrote to clients in a report on Thursday. “What was initially touted as a ‘short term excursion’ is now in its fourth week.” .SPX 1M mountain S & P 500 over the past month If the war can come to a “rapid resolution,” Kapteyn said the S & P 500 could soon bottom and eventually rebound toward 7,150 into the end of the year. That implies 8.5% upside over Wednesday’s close, and more after Thursday’s slide. Alternatively, if business is disrupted until the end of April, Kapteyn said the S & P 500 could drop as low as 6,000 before bouncing. That’s nearly 9% below where the index finished Wednesday. Should a more prolonged shock lead to energy shortages, the S & P 500 could plunge to perhaps the 5,350 area, at which point stocks would have fallen another 19% from where they ended the day Wednesday. But Asian markets should suffer the most, due to their reliance on Persian Gulf energy, UBS said. European equities are also expected to underperform the U.S., Kapteyn said. Monday’s brief market rebound showed U.S. investors still hoping for a ceasefire and quick resolution, Kapteyn said. More worryingly, however, the London-based economist also noted that recessions tend be preceded by oil spikes, given their ripple effects throughout the economy.