Possible scenario
Managed Diplomatic Stalemate
30% Chance
The talks fail to resolve the U.S. allegations of covert Chinese testing, but both governments avoid a rupture. This is plausible because each side has incentives to preserve deterrence messaging while preventing the dispute from contaminating trade, Taiwan, and military-to-military channels.
Initial impacts
- Market volatility Up
- Riskier companies' borrowing costs Up
- 10-year Treasury yield Down
- US dollar Up
Secondary impacts
- Technology -0.7%
- Industrials +0.6%
Portfolio impact
S&P 500-0.5%
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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