Prolonged Conflict in Iran Could Trigger 10%-15% Global Stock Market Decline, Warns Institution

Deep News13:20

Global equity markets are currently holding firm, with investors anticipating a gradual de-escalation of conflict and a normalization of oil prices. However, CGS International warns that the longer the Strait of Hormuz remains effectively closed, the greater the risk of economic disruption and market stress. An analyst stated that it is not the time for complacency, noting that current high market valuations and tight credit spreads mean that sustained disruptions could trigger a market correction of 10% to 15%. While the U.S. government may seek a path to de-escalation, the risk of the situation worsening remains. The report highlighted that the S&P 500 index is currently only about 5% below its all-time high, suggesting investors are banking on a "TACO" outcome—where the former U.S. president is perceived as likely to back down from confrontation—fostering a buy-the-dip mentality.

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