BoA warns Iran could spark market-disrupting scorched-earth moves, hedge up

Bank of America’s equity-derivatives strategists warn that the Iranian regime’s hardline posture could trigger a scorched-earth strategy to maximize economic disruption and shock financial markets, so investors should maintain hedges. They note recent market weakness is concentrated in momentum-driven pockets (like U.S. materials, EM equities, and miners) and caution that periods of high uncertainty can push prices away from fundamentals, making crowded trades vulnerable to sharp reversals; they also reference the bubble-risk indicator (BRI) to gauge where risk is highest. Oil-price volatility and futures movement underscore the ongoing risk environment.