What if NATO commits to 5%-of-GDP by 2035?
Allies formalize a 5%-of-GDP defense target, launching a multi-year European rearmament super-cycle that structurally re-rates defense primes and lifts industrial demand.
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 3–10 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. Allies formalize a 5%-of-GDP defense target, launching a multi-year European rearmament super-cycle that structurally re-rates defense primes and lifts industrial demand. The trigger decomposes into signed root‑shocks — Defense spending ▲ · Geopolitical risk ▲ · Industrial demand ▲ · Risk appetite ▲ — 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 | ▲ +3.6% hist -0.44–+6.59% · other way -3.49% (n=12) |
| 2 | Lockheed LMT 📈 chart | Equity | ▲ +1.7% hist +0.55–+1.25% · other way -1.53% (n=12) |
| 3 | Northrop NOC 📈 chart | Equity | ▲ +1.5% hist -0.6–+1.16% · other way +0.75% (n=12) |
| 4 | RTX RTXon Hyperliquid 📈 chart | Equity | ▲ +1.3% hist -0.02–+0.84% · other way -2.56% (n=12) |
| 5 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -1.1% hist -0.77–-0.28% · other way +1.52% (n=12) |
| 6 | Tech sector XLK 📈 chart | Equity | ▼ -0.8% hist -0.52–+0.05% · other way +1.59% (n=12) |
| 7 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▼ -0.6% hist -0.4–-0.09% · other way +0.63% (n=12) |
| 8 | Semiconductors SMHon Hyperliquid 📈 chart | Equity | ▼ -0.5% hist -0.42–+0.05% · other way +0.92% (n=12) |
| 9 | Freeport (copper) FCX 📈 chart | Equity | ▲ +0.4% hist -3.09–+1.13% · other way +7.78% (n=12) |
| 10 | Gold XAUon Hyperliquid 📈 chart | Commodity | ▲ +0.4% hist -0.3–+0.34% · other way +3.02% (n=12) |
| 11 | Nvidia NVDAon Hyperliquid 📈 chart | Equity | ▼ -0.4% hist -0.33–+0.09% · other way +7.76% (n=12) |
| 12 | High-yield credit HYG 📈 chart | Rate | ▼ -0.3% hist -0.84–+0.11% · other way +2.52% (n=10) |
| 13 | AMD AMDon Hyperliquid 📈 chart | Equity | ▼ -0.4% hist -0.41–+0.26% · other way +4.75% (n=12) |
| 14 | Broadcom AVGOon Hyperliquid 📈 chart | Equity | ▼ -0.4% hist -1.12–+2.92% · other way -0.12% (n=8) |
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 |
|---|---|---|---|---|---|---|
| High-yield credit HYG | SHORT | -0.6% · 5d -0.2% | 66% | 35 | 0.26 | ✓ matches cascade |
| 10y yield DGS10 | LONG | +14bp · 5d +7bp | 64% | 39 | 0.25 | · |
| Volatility VIX | LONG | +4.4% · 5d +0.6% | 64% | 37 | 0.23 | ✓ matches cascade |
| XCU XCU | SHORT | -2.0% · 5d -1.4% | 63% | 36 | 0.23 | ⚠ differs |
| INTC INTC | SHORT | -3.2% · 5d -1.9% | 63% | 37 | 0.22 | ✓ matches cascade |
| FCX FCX | SHORT | -3.0% · 5d -2.5% | 63% | 36 | 0.21 | ⚠ differs |
| AVGO AVGO | LONG | +2.8% · 5d -1.2% ↺ fades | 61% | 34 | 0.20 | ⚠ differs |
| US dollar DXY | LONG | +0.3% · 5d +0.2% | 58% | 39 | 0.14 | ✓ matches cascade |
| RTX RTX | SHORT | -0.5% · 5d -1.0% | 57% | 39 | 0.13 | ⚠ differs |
| MSTR MSTR | LONG | +5.0% · 5d -2.9% ↺ fades | 58% | 36 | 0.13 | ⚠ differs |
| Gold XAU | SHORT | -0.5% · 5d -1.1% | 57% | 36 | 0.12 | ⚠ differs |
| ASML ASML | SHORT | -3.0% · 5d -1.9% | 58% | 36 | 0.12 | ✓ matches cascade |
| NOC NOC | SHORT | -1.2% · 5d -0.7% | 57% | 37 | 0.11 | ⚠ differs |
| XLK XLK | LONG | +0.3% · 5d -0.5% ↺ fades | 57% | 36 | 0.11 | ⚠ differs |