What if Power-capex inflation squeezes utility allowed returns and earnings?
Rising equipment, labor and financing costs outpace allowed-return adjustments, compressing utility earned ROEs and pressuring the sector's earnings even amid load growth.
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 6–18 months 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. Rising equipment, labor and financing costs outpace allowed-return adjustments, compressing utility earned ROEs and pressuring the sector's earnings even amid load growth. The trigger decomposes into signed root‑shocks — Inflation surprise ▲ · Real yields ▲ · 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 | Tech sector XLK 📈 chart | Equity | ▼ -0.6% hist -0.44–-0.16% · other way -0.63% (n=12) |
| 2 | 30y Treasury yield DGS30 📈 chart | Rate | ▲ +5bp hist -1.26–+9.31% · other way +3.0% (n=12) |
| 3 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -0.5% hist -0.7–+0.03% · other way -0.64% (n=12) |
| 4 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▼ -0.5% hist -1.39–+2.4% · other way +31.36% (n=12) |
| 5 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▼ -0.5% hist -0.82–+1.2% · other way -0.38% (n=12) |
| 6 | 10y Treasury yield DGS10 📈 chart | Rate | ▲ +4bp hist -0.52–+6.93% · other way +6.9% (n=12) |
| 7 | Gold XAUon Hyperliquid 📈 chart | Commodity | ▼ -0.4% hist -0.41–+0.48% · other way +0.35% (n=12) |
| 8 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▼ -0.3% model prior · unmeasured |
| 9 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▼ -0.3% hist -2.29–+0.85% · other way +5.16% (n=12) |
| 10 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▼ -0.3% hist -0.66–+0.93% · other way +7.51% (n=12) |
| 11 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▼ -0.2% hist -0.38–+0.06% · other way +0.76% (n=12) |
| 12 | Coinbase COINon Hyperliquid 📈 chart | Equity | ▼ -0.2% hist -1.93–+4.61% · other way +24.59% (n=12) |
| 13 | Arm ARMon Hyperliquid 📈 chart | Equity | ▼ -0.2% hist -7.25–+1.08% · other way +0.73% (n=11) |
| 14 | Homebuilders XHB 📈 chart | Equity | ▼ -0.2% hist -0.16–+0.11% · other way +0.04% (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 |
|---|---|---|---|---|---|---|
| ARM ARM | SHORT | -6.0% · 5d -6.4% | 74% | 26 | 0.35 | ✓ matches cascade |
| Gold XAU | LONG | +0.7% · 5d -0.7% ↺ fades | 58% | 35 | 0.13 | ⚠ differs |
| COIN COIN | LONG | +4.4% · 5d +0.9% | 57% | 31 | 0.13 | ⚠ differs |
| 30y yield DGS30 | LONG | +6bp · 5d +5bp | 55% | 40 | 0.09 | ✓ matches cascade |
| 10y yield DGS10 | LONG | +4bp · 5d +5bp | 55% | 40 | 0.09 | ✓ matches cascade |
| Volatility VIX | LONG | +3.1% · 5d +5.0% | 56% | 35 | 0.09 | · |
| MSTR MSTR | LONG | +2.6% · 5d -0.5% ↺ fades | 53% | 35 | 0.06 | ⚠ differs |
| SOL SOL | LONG | +1.4% · 5d -5.2% ↺ fades | 54% | 33 | 0.05 | ⚠ differs |
| ETH ETH | SHORT | -2.0% · 5d -3.1% | 53% | 34 | 0.05 | ✓ matches cascade |
| XHB XHB | LONG | +0.2% · 5d -0.8% ↺ fades | 53% | 34 | 0.05 | ⚠ differs |
| NDX NDX | SHORT | -0.4% · 5d -1.0% | 51% | 36 | 0.02 | ✓ matches cascade |
| SMH SMH | SHORT | +-0.0% · 5d -1.0% | 51% | 35 | 0.02 | ✓ matches cascade |
| High-yield credit HYG | LONG | +0.2% · 5d +0.2% | 51% | 34 | 0.02 | · |
| US dollar DXY | LONG | +0.1% · 5d +0.3% | 51% | 40 | 0.01 | · |