Possible scenario
Contained Retaliation Cycle
40% Chance
Washington and Tehran exchange calibrated blows but avoid a declared war or attacks designed to cause mass casualties. The most likely path is a short, dangerous retaliation cycle because both sides have already crossed thresholds but still have incentives to keep oil flowing and avoid regime-threatening escalation.
Initial impacts
- Riskier companies' borrowing costs Up
- Market volatility Up
- Oil prices Up
- 10-year Treasury yield Down
- US dollar Up
Secondary impacts
- Energy +3.1%
Portfolio impact
S&P 500-1.1%
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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