Possible scenario
Direct Military Escalation
20% Chance
The US responds more forcefully to mined sea lanes and tanker strikes, while Iran retaliates through missiles, drones or proxy attacks. This would shift the market from an oil supply scare toward a broader geopolitical risk event.
Initial impacts
- Riskier companies' borrowing costs Up
- Market volatility Up
- 10-year Treasury yield Down
- Oil prices Up
- US dollar Up
Secondary impacts
- Energy +4.4%
Portfolio impact
S&P 500-2.4%
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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