What if the US launches direct strikes on cartels in Mexico?
US strikes inside Mexico plus a border shutdown is a USMCA/peso rupture, so the actionable trade is MXN and auto-supply-chain names -- the semis-heavy cascade misreads the channel. Rhymes with 2019's tariff-threat episodes when MXN and Mexican equities sold off on border-closure rhetoric. Transmission: ~$800bn in annual bilateral trade and integrated auto/electronics lines mean a closure hits US autos and Mexican exporters first. Forward: an actual military strike is unprecedented, so the sovereignty/diplomatic premium in MXN would exceed any past tariff scare.
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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 (electric blue) over time vs the market's (Polymarket, amber), 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. Loading the probability audit trail…
What it would mean
If this plays out, it is a risk-off shock. US military launches direct strikes on cartel targets inside Mexico, provoking a diplomatic rupture and border-trade shutdown. The trigger decomposes into signed root‑shocks — Geopolitical risk ▲ · Trade tension ▲ · Risk appetite ▼ — which propagate through our causal graph to the markets below.