Veteran strategist Ed Yardeni has raised the probability of a US stock market meltdown to 35% for the rest of 2025, up from 20% previously, citing escalating conflict in Iran. The warning comes as crude oil prices surged above $100 a barrel for the first time since 2022, triggering a selloff in stocks and Treasuries.

Yardeni slashed the odds of a market rally to just 5% from 20%, reflecting mounting concern that a prolonged Middle East conflict could squeeze households and erode corporate profit margins. The Federal Reserve faces a difficult balancing act as higher oil prices threaten to fuel inflation while potentially slowing economic growth.

The S&P 500 futures fell 1.6% in early Asian trading Monday, signaling fresh pressure on equities. Yardeni's base case scenario of a 'Roaring 2020s' decade of robust US growth still carries a 60% probability through year-end, though he sees an 85% chance of this continuing over the next decade.