Rising bond yields, not falling stock prices, are more likely to trigger White House intervention to end the war, according to Wolfe Research.
Analyst Chris Senyek notes yields have resumed their move higher after hot inflation prints refocused markets on the Fed's inability to maintain its easing bias.
Wolfe believes the Trump administration is more likely to act when yields become unhinged higher vs. when stocks fall.
The U.S. Treasury market has been signaling persistent inflation for some time, with this week marking a tipping point.
Bond vigilantes could push yields higher to pressure the Trump administration toward a swift resolution on Iran.
Beyond geopolitics, Wolfe flags stretched equity market momentum as vulnerable, with crowded positioning and sensitivity to bad news.
Senyek outlines additional risks that could derail the rally: a strengthening yen, sticky inflation from energy prices, disappointing AI spending, and private credit market stress.
