Global equity markets face a 10% correction, potentially deepening to 15% if Iran maintains its blockade of the Strait of Hormuz, according to Yardeni Research. The firm notes investor sentiment was already stretched before the conflict escalated, making a pullback likely. The analysts highlight the Strait's critical role as a key oil shipping route, stating it's 'hard to imagine' Iran won't use drones and speed boats to enforce the blockade. Prolonged disruption could push crude prices higher, raising stagflation risks in major economies. So far, energy stocks and commodities have provided the best hedge against the conflict, while global equities, especially in emerging markets, have suffered as oil prices and the U.S. dollar rise.