Possible scenario
Red Sea spillover
20% Chance
The civilian deaths give the Houthis a pretext to revisit pressure on maritime traffic, even though the May 2025 U.S.-Houthi shipping truce reduced attacks. This scenario would matter most for markets because the Bab el-Mandeb route links Asia, Europe and energy flows.
Initial impacts
- Riskier companies' borrowing costs Up
- Market volatility Up
- Oil prices Up
- 10-year Treasury yield Down
- US dollar Up
Secondary impacts
- Energy +1.3%
- Industrials
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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