A prolonged war in Iran is the market’s real ‘black swan,’ says this strategist

Alicia Levine of BNY's wealth management business argues that markets have not priced in the possibility of a prolonged war in Iran, which she describes as the market's real "black swan." Her point is less about the conflict itself than about duration: investors appear to be treating the war as a contained, short-lived event, while the risk she highlights is a long one that gradually reshapes expectations.

That distinction matters because markets typically absorb initial shocks quickly and then move on. A drawn-out conflict is different. It can keep upward pressure on energy prices, sustain uncertainty over trade routes and regional stability, and feed into inflation and central-bank calculations over time. Each of those channels can affect valuations without producing a single dramatic headline.

What to watch is whether pricing shifts as the conflict's timeline extends — in energy markets, in inflation expectations, and in how companies discuss supply and cost risks. Levine's comment is a reminder that the most consequential risks are often not the sharpest ones, but the ones that persist long enough to change how investors think.