Possible scenario
Limited Coordinated Retaliation
45% Chance
Saudi Defense Minister Khalid bin Salman and UAE President Sheikh Mohamed bin Zayed agree on a contained military response focused on Houthi missile and drone infrastructure. This is the most likely outcome because both capitals want deterrence after attacks on Riyadh and Aramco-linked facilities, but neither wants a direct regional war.
Initial impacts
- Riskier companies' borrowing costs Up
- Market volatility Up
- Oil prices Up
- 10-year Treasury yield Down
Secondary impacts
- Energy +0.6%
- Industrials +0.5%
Portfolio impact
S&P 500-0.3%
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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