Possible scenario
Military Escalation
20% Chance
A further Houthi missile or drone attack pushes Saudi Arabia and the UAE toward more active joint operations, with U.S. support focused on intelligence, air defense, and maritime tracking. This would mark a material escalation from coordination to kinetic action, lifting oil risk premiums and defense exposure.
Initial impacts
- Market volatility Up
- Riskier companies' borrowing costs Up
- Oil prices Up
- 10-year Treasury yield Down
- US dollar Up
Secondary impacts
- Energy +1.9%
Portfolio impact
S&P 500-1.2%
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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