Possible scenario
Direct Military Escalation
20% Chance
A misidentified vessel, drone interception, or missile-defense response produces a direct U.S.-Iran military clash. Both governments may initially frame the exchange as defensive, but markets would price a higher probability of temporary disruption to Gulf oil flows.
Initial impacts
- Riskier companies' borrowing costs Up
- Market volatility Up
- 10-year Treasury yield Down
- Oil prices Up
- US dollar Up
Secondary impacts
- Energy +3.5%
Portfolio impact
S&P 500-2.2%
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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