Markets Remain Steady Despite Israel-Hamas Conflict, But Investors on Edge Over Wider Geopolitical Risks

Markets have been surprisingly calm despite the escalating Israel-Hamas conflict, indicating investors are accustomed to geopolitical tensions.

Most asset managers expect the conflict to remain localized and have limited market impact unless it spreads regionally.

Extreme "tail risks" like invasion of Taiwan are now considered non-negligible, but challenging to price into markets.

Safe haven assets like bonds and gold have not seen major influxes, suggesting nowhere left to hide from geopolitical risks.

Major risks like debt crises in emerging markets and political instability in developed markets like the U.S. also contribute to investor unease.