What if sustained great-power tension forces European defense budgets toward 3-5% of GDP?
Sustained great-power tension forces European defense budgets toward 3–5% of GDP, widening fiscal deficits and term premia even as it boosts the defense sector.
how we built this number — every step
The class rate is measured from our dated, sourced event library (decade-normalized Poisson — the full table is public at base_rates.json). The variant’s share within its class is the analyst’s editorial call, published so you can audit it. A wider range means thinner precedent. Full recipe: methodology · scored at Reality Check.
The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (gold) over time vs the crowd's (Polymarket, blue), from the past toward the 1–3 years horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. The gold path is an illustrative reconstruction anchored to today's estimate — real dated events, not a live re-estimate history.
What it would mean
If this plays out, it is a risk-off shock. Sustained great-power tension forces European defense budgets toward 3–5% of GDP, widening fiscal deficits and term premia even as it boosts the defense sector. The trigger decomposes into signed root‑shocks — Credit spreads ▲ · Defense spending ▲ · Geopolitical risk ▲ · Real yields ▲ — which propagate through our causal graph to the markets below.
If it happens — the markets it would move
Biggest moves first. Projected moves are cascade-model priors; hist A–B% = what comparable past events actually did (measured abnormal returns), and model prior · unmeasured marks markets with no analogue backing yet. Tap any market for its price history.
| Market | Class | Projected move | |
|---|---|---|---|
| 1 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▲ +6.4% hist -0.08–+8.9% · other way -3.55% (n=12) |
| 2 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -2.6% hist -1.79–-0.66% · other way +0.4% (n=12) |
| 3 | Tech sector XLK 📈 chart | Equity | ▼ -2.1% hist -1.35–-0.13% · other way +0.42% (n=12) |
| 4 | Lockheed LMT 📈 chart | Equity | ▲ +1.5% hist +0.23–+1.64% · other way -2.86% (n=12) |
| 5 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▼ -1.4% hist -1.4–-0.28% · other way -0.7% (n=12) |
| 6 | Northrop NOC 📈 chart | Equity | ▲ +1.4% hist +0.1–+1.67% · other way -2.07% (n=12) |
| 7 | RTX RTXon Hyperliquid 📈 chart | Equity | ▲ +1.2% hist -1.03–+0.88% · other way -3.05% (n=12) |
| 8 | Semiconductors SMHon Hyperliquid 📈 chart | Equity | ▼ -1.2% hist -0.99–+0.5% · other way +3.07% (n=12) |
| 9 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▼ -1.2% hist -1.18–+0.51% · other way +25.41% (n=12) |
| 10 | High-yield credit HYG 📈 chart | Rate | ▼ -0.8% hist -1.06–-0.05% · other way -0.07% (n=12) |
| 11 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▼ -0.7% hist -5.47–+1.92% · other way +6.5% (n=11) |
| 12 | Nvidia NVDAon Hyperliquid 📈 chart | Equity | ▼ -0.9% hist -0.91–+0.5% · other way +3.1% (n=12) |
| 13 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▼ -0.7% hist -3.66–+1.69% · other way -3.1% (n=11) |
| 14 | AMD AMDon Hyperliquid 📈 chart | Equity | ▼ -0.8% hist -1.09–+1.1% · other way +0.74% (n=12) |
Probable recommendation
Historical precedent — what analogous events actually did
Across 40 analogous events (overlap‑weighted), as abnormal returns — market beta stripped, so it's the event's own effect, not the market backdrop. Shown at 20 days (persistent) and 5 days (immediate); ↺ fades = the two horizons disagree. Confidence = consistency × sample × significance.
| Asset | History says | Abnormal (20d · 5d) | Hit | n | Confidence | vs cascade |
|---|---|---|---|---|---|---|
| COIN COIN | LONG | +12.5% · 5d +9.2% | 85% | 12 | 0.55 | ⚠ differs |
| HOOD HOOD | LONG | +8.2% · 5d +0.9% | 69% | 12 | 0.36 | ⚠ differs |
| MRVL MRVL | SHORT | -0.5% · 5d -2.9% | 72% | 40 | 0.35 | ✓ matches cascade |
| High-yield credit HYG | SHORT | -0.6% · 5d -0.1% | 69% | 37 | 0.31 | ✓ matches cascade |
| AVGO AVGO | LONG | +4.0% · 5d -0.5% ↺ fades | 66% | 31 | 0.31 | ⚠ differs |
| ETH ETH | SHORT | -6.8% · 5d -3.5% | 68% | 18 | 0.28 | ✓ matches cascade |
| AUD AUD | SHORT | -1.0% · 5d -0.0% | 63% | 38 | 0.24 | ✓ matches cascade |
| RTX RTX | SHORT | -1.5% · 5d -1.6% | 61% | 40 | 0.19 | ⚠ differs |
| SOL SOL | SHORT | -3.3% · 5d -7.4% | 65% | 12 | 0.19 | ✓ matches cascade |
| XLF XLF | SHORT | -0.7% · 5d -0.9% | 60% | 40 | 0.18 | ✓ matches cascade |
| XHB XHB | SHORT | -1.1% · 5d -0.1% | 59% | 38 | 0.15 | ✓ matches cascade |
| TRY TRY | SHORT | -0.6% · 5d +1.1% ↺ fades | 59% | 38 | 0.14 | ✓ matches cascade |
| ASML ASML | SHORT | -2.1% · 5d -3.1% | 59% | 40 | 0.13 | ✓ matches cascade |
| US dollar DXY | LONG | +0.6% · 5d +0.2% | 58% | 40 | 0.13 | ✓ matches cascade |