Investment bank: If the Strait of Hormuz is closed, the stock market could plummet by 20%.

The British investment bank Panmure Liberum believes that if Iran retaliates against attacks on its nuclear facilities but does not close the Strait of Hormuz, the stock market could face an initial decline of approximately 5%-10%. However, if Iran does close the Strait of Hormuz, the inflation impact would be significant but not enough to derail the markets and economies of the United States, the United Kingdom, and the Eurozone in the long term. The bank stated that if the strait is closed, "we expect a severe stagflation shock similar to that of 2022." In this scenario, the stock market could drop by 10% to 20%. The bank also added that if the trade war escalates again in early July, a new bear market could emerge.