Turkey's downing of a Russian warplane shows why geopolitics matter to financial markets.

Global markets backed down on Tuesday amid fears the incident will further inflame tensions between Moscow and the West.

Turkey is a member of NATO, which means the U.S. is bound to defend it from any potential military response from Russia.

Few expect the incident will spark a war, but the mere fact that a NATO country has shot down a Russian warplane has investors on edge.

Here's a look at the other geopolitical hot spots that have the potential to trip up the global economy and the bull market in U.S. stocks in 2016.

Correction: An earlier version of this article inadvertently included an erroneous map of the Middle East that was distributed by a photo agency. We regret the error.