If you've been gauging the severity of the war in Iran by just looking at the S&P 500,

you'd be forgiven for thinking that the whole thing is just a minor administrative hurdle,

the kind that clears up after a weekend of strongly worded tweets. Equity investors, it would appear,

have decided that a regional conflict might just be a buy-the-dip

opportunity. That calm finally broke on Thursday, when stocks had their worst day since the

conflict began, with the S&P 500 sliding to a six-month low, and the tech-heavy NASDAQ officially

crossing into a technical correction,

meaning that it's more than 10% below its high. The mood on the bond and commodity desks

remains grim. Analysts there are staring at their screens in a state of what one commentator

called alarming cognitive dissonance.

In the bond market, the term premium, effectively the insurance premium investors charge

for holding long-term debt, is surging.

Robert Armstrong noted this week that while 10-year interest rates have gone up, break-even inflation has stayed

relatively flat. This suggests that investors aren't just worried about inflation. They're worried

that in a world of supply shocks, bonds no longer act as a good hedge for stocks. They simply

both fall at the same time. In the UK, 30-year guild yields have climbed

to 5.5% as the Bank of England faces a central banker's nightmare, an energy shock that

raises inflation while killing growth. This divergence is being driven by a new Wall Street obsession, the Trump

pressure index. Developed by Deutsche Bank's head of cross-asset strategy, the index is made up of the

one-month change in Trump's approval ratings, one-year inflation expectations, the performance

of the S&P 500 and US Treasury yields.

The idea is that these are the things that Trump cares the most about.

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