As tensions with Iran escalate, economists increasingly worry about a potential global recession. While Iran claims "great progress" in talks, the blockage of the Strait of Hormuz continues to threaten global oil supplies. Almost 10 weeks into the conflict, the possibility of worldwide economic contraction is appearing on analysts' radar screens.

The International Monetary Fund's $50 World Economic Outlook report has quickly become outdated as the situation deteriorates. The differences between the IMF's "reference scenario" and now more likely "adverse" or "severe" scenarios are substantial, with investors taking note of the growing risks to worldwide economic stability.

While Iran probably won't directly cause U.S. growth to contract this year, American investors face significant exposure. Most S&P 500 companies operate internationally, meaning even the dominant AI investment theme could suffer if corporations and households worldwide tighten spending. The interconnected nature of modern markets means no major economy is truly immune to global disruptions.