Escalation Around Diplomacy

One side, most likely Russia, escalates militarily to improve leverage before negotiations or to signal that a line freeze is unacceptable. This is less likely than stalled diplomacy but remains a serious tail risk given the gap between Moscow’s Donbas demand and Kyiv’s refusal to cede territory.

Each figure is the modeled move of the S&P 500 if the outcome occurs. For information only. Not investment advice.