Possible scenario
Limited Chinese Retaliation
45% Chance
Beijing treats Lai Ching-te's National Day language as a provocation but chooses a calibrated response short of a major crisis. The most likely path is familiar coercive signaling through the People's Liberation Army, Coast Guard, and sanctions rhetoric, similar to China's response after Lai's 2024 inauguration.
Initial impacts
- Market volatility Up
- 10-year Treasury yield Down
- US dollar Up
Secondary impacts
- Technology -0.9%
- Industrials -0.4%
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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