Possible scenario
Diplomatic Escalation
25% Chance
The investigation becomes a bilateral confrontation as Brasília accuses Washington of tolerating or encouraging actions against Lula's reelection campaign. Given the earlier tariff threats, judicial sanctions, and Lula's warnings, a renewed diplomatic clash is a realistic downside path.
Initial impacts
- Riskier companies' borrowing costs Up
- Market volatility Up
- 10-year Treasury yield Down
- US dollar Up
Secondary impacts
- Industrials -0.6%
- Non-Energy Materials -0.6%
Portfolio impact
S&P 500-0.8%
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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