The past few months have not started well for the S&P 500 and Dow Jones for a variety of reasons. But every time things have taken a positive turn, corrections have been met with the classic “buy the dip” mentality. 

Now that the Fed has cut rates by 50 basis points and the economy is holding up relatively well (at least on paper), there doesn't seem to be much to worry about, and stock growth should continue. 

The problem is that nothing can grow forever, and we could see a trend reversal at some point. The real question is not whether this will happen but when and what will trigger the change. 

Several potential scenarios, or black swans, already exist that could affect the U.S. economy and ultimately change market sentiment from extremely bullish to “all is lost, the ship is sinking.” 

First and foremost is the threat of a major war in the Middle East. Just a couple of days ago, it seemed that the conflict would stay local, but after Iran attacked Israel, the stakes have risen. 

For example, Trump called the recent developments a declaration of war, and Israeli officials have promised a “significant response.” For its part, Tehran is threatening even more devastating attacks in the latter case. 

The main risk to global markets is that Iran might try to close the Strait of Hormuz, a narrow passage at the entrance of the Persian Gulf that carries a lot of Arab oil and LNG exports. 

If that were to happen, we could see major consequences, such as skyrocketing oil prices and logistical disruptions. This could reignite inflation problems worldwide and complicate matters for central banks. 

Another risk is that Japanese investors will lose interest in foreign markets, especially overseas assets. This is important because their investments amount to a staggering $4.4 trillion. 

If they were to start pulling back, global markets would falter, and a crash could be triggered. Rising Japanese bond yields, as the Bank of Japan raises interest rates, could be the trigger. 

Although yields on these bonds remain lower than those in the US and Europe, which keeps foreign assets attractive, Japanese investors are trimming their positions in the US and European equities. 

Other challenges could be a renewed trade war between China and the US and worsening conditions in the European economy. Overall, there are many issues on a global scale, so it is essential to stay cautious.