How These Experts Think About Global ‘Black Swans’

Investors are always asking “What’s next?” These days they may also need to wonder: “What if?”

What if unrest in Iran leads to its government’s collapse, shocking oil markets and causing a global recession? Or if China’s technology companies have a major breakthrough? Or if Russia seizes territory from a member nation of the North Atlantic Treaty Organization? Or if, in that event, the U.S. refuses to come to that ally’s aid?

Those unexpected risks could send shockwaves through global markets and investment portfolios, analysts say, much as they did during last year’s Liberation Day-triggered downturn or this week’s Greenland tensions. So-called “black swan” events can be difficult to plan around, but geopolitical strategists have ideas for how to deal when the theoretical become real—as those from BCA Research suggested this week.

Let’s say the Iranian regime falls, and the country’s leaders decide to disrupt crude oil markets. A year without Iranian production would wipe out OPEC’s and Russia’s spare capacity, which could lead to a greater than 3% short-term rise in oil prices and a 10% jump in the following three- and 12-month periods, according to BCA. Bond yields would also eventually take a hit, the analysts wrote.

“We estimate that today’s Iran crisis has a 38% chance of producing a massive shock that could cause yields to rise at first, only to fall when global demand destruction becomes apparent,” BCA’s research team, led by Chief Political Strategist Matt Gertken, wrote.

If China delivers another DeepSeek moment as seen last January, which put the hurt on the U.S.’s biggest tech stocks—among them Alphabet (GOOGL), Amazon (AMZN), Apple (AAPL), Meta Platforms (META), Microsoft (MSFT), Nvidia (NVDA) and Tesla (TSLA)—investors may again question the valuations attributed to leading American innovators, BCA wrote, and press on American companies’ pricing power. The firm puts a coin-toss probability of a tech bubble bursting.

Another China scenario: The country moves to broaden its reach and seize Taiwan by 2027. While that isn’t in BCA’s base-case, 20% of the U.S.’s economic output would be at risk if electronics shipping out of Taiwan was halted.

Then there’s Russia and NATO. If Russia seizes territory from a NATO member country, it could widen the rift between the U.S. and Europe—or reunite them. Russia “could become more desperate” if Trump sides with Europe, BCA wrote, and escalate the conflict to a full-blown war.

The U.S. might also refuse to aid a NATO ally or effectively destroy the alliance, which the research firm does not foresee. U.S. GDP growth is at risk in the event of a war between Russia and NATO, putting long-term treasuries—of which foreign governments hold a lot—at risk assuming tensions between the U.S. and Europe grow.

Market reaction to international events over the last year would suggest investors dive into Europe’s stock, bonds, and currency. With the above black swan events in mind, holding a bullish stance on U.S. stocks and emerging market stocks—excluding China’s—is warranted for now, Gertken and his team said.

When “signs that China will stimulate its economy” emerge, they wrote, it would be time to start “diversifying away” from the U.S. In other words: Don’t sell America just yet.