Possible scenario
Allies Manage Escalation
15% Chance
Washington and Seoul use the North Korean warning to clarify that the submarine program is conventionally armed and focused on deterrence, endurance and alliance interoperability. Diplomacy with Japan and public messaging reduce the risk of miscalculation.
Initial impacts
- Market volatility Down
- Riskier companies' borrowing costs Down
- 10-year Treasury yield Up
- US dollar Up
Secondary impacts
- Industrials +0.3%
- Technology +0.1%
Portfolio impact
S&P 500+0.1%
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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