BCA Research's Chief Strategist, Daval Joshi, has identified a specific market threshold that could determine the trajectory of the US-Iran conflict: a combined 12%-15% decline in stocks and bonds. Joshi stated this level represents President Trump's "tipping point" in the current conflict, as well as in last year's tariff war. The strategist noted that "markets are currently 7% above this tipping point," suggesting a combined 7% sell-off would provide strong support for the S&P 500 and funds tracking US Treasuries with maturities exceeding 20 years.

Joshi described Iran's strategy as deploying what he termed "General Stock Market" and "General Bond Market" as proxies in conventional warfare. "Iran does not need to sink any US warships—damaging the US stock and bond markets could inflict greater harm," Joshi argued in his analysis.

According to the BCA Research strategist, this dynamic has created a pattern: as deadlines for Iran approach, Trump announces "deadline extensions" under market pressure, only to declare insufficient progress once markets recover. Joshi explained that conflicting interests drive Trump's sensitivity to stock and bond markets. He indicated Trump's base primarily concerns itself with surging gas prices, inflation, and mortgage rates—all reflected in bond market performance—while having limited exposure to stocks.

Simultaneously, Joshi observed the US economy is "increasingly reliant on spending by retiring baby boomers," whose wealth is tied to stock market performance. Furthermore, the turbulent environment makes it difficult for investors to apply traditional frameworks. Joshi cited research describing how markets "fluctuate like meme coins in a ping-pong game between Trump tweets and AP headlines."

Based on his analysis, if the iShares 20+ Year Treasury Bond ETF falls by 2%, support for the S&P 500 would lie at 6400 points; if it remains flat, support would stand at 6250 points. For investors seeking positions independent of the conflict's outcome, Joshi recommended three trades: going long on gold relative to silver, going long on Ethereum, and underweighting Japanese stocks.

The strategist warned that Japanese stocks' strong performance has been driven by the "sugar high" of deeply negative real interest rates. As inflationary pressures intensify, Japanese equities face "significant position unwinding risks" regardless of the Middle East conflict's outcome.