Possible scenario
Calibrated Military Response
20% Chance
Riyadh responds militarily to restore deterrence while trying to avoid a full regional confrontation. The most likely response is targeted against Houthi launch infrastructure, but escalation risk rises if attacks extend toward Red Sea shipping or Gulf energy flows.
Initial impacts
- Market volatility Up
- Riskier companies' borrowing costs Up
- Oil prices Up
- 10-year Treasury yield Down
- US dollar Up
Secondary impacts
- Energy +2.1%
- Industrials
Portfolio impact
S&P 500-0.9%
Each figure is the modeled move of the S&P 500 if the outcome occurs. For information only. Not investment advice.
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