Possible scenario
Red Sea Escalation
20% Chance
The Iran-Oman conversation fails to restrain the Houthis, and the breakdown in Saudi-Houthi negotiations spills back into maritime risk. This is less likely than continued diplomacy, but the December 2023 precedent shows that Houthi attacks can quickly affect shipping and energy sentiment.
Initial impacts
- Market volatility Up
- Riskier companies' borrowing costs Up
- Oil prices Up
- 10-year Treasury yield Down
- US dollar Up
Secondary impacts
- Energy +0.7%
Portfolio impact
S&P 500-0.4%
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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