Possible scenario
Serious Escalation
16% Chance
A larger Taliban retaliation or Pakistani strike causing higher casualties could push the confrontation into a more dangerous phase. Even then, both governments would likely try to avoid a conventional interstate war, but market sensitivity would rise because Pakistan is nuclear-armed and politically fragile.
Initial impacts
- Riskier companies' borrowing costs Up
- Market volatility Up
- 10-year Treasury yield Down
- Oil prices Up
- US dollar Up
- Copper Down
Secondary impacts
- Industrials
Portfolio impact
S&P 500-1.3%
Each figure is the modeled move of the S&P 500 if the outcome occurs. For information only. Not investment advice.
Keeping an eye on this scenario?
Tilt can alert you when its probability or impact shifts, or send you a recommendation when it crosses a threshold.