Possible scenario
Broader Red Sea Disruption
22% Chance
A more severe but still plausible path is that repeated Houthi attacks force more carriers to divert around the Cape of Good Hope. This would resemble earlier Red Sea disruptions, lifting oil and freight risk premia without necessarily becoming a full regional war.
Initial impacts
- Market volatility Up
- Riskier companies' borrowing costs Up
- Oil prices Up
- 10-year Treasury yield Down
- US dollar Up
Secondary impacts
- Energy +2.2%
- Industrials
Portfolio impact
S&P 500-1.3%
Each figure is the modeled move of the S&P 500 if the outcome occurs. For information only. Not investment advice.
Keeping an eye on this scenario?
Tilt can alert you when its probability or impact shifts, or send you a recommendation when it crosses a threshold.