ONE MARKET SNEEZES. THE WORLD CATCHES A COLD.

That's contagion. A shock hits one place, panic spreads, and suddenly everything is falling together, even assets that had nothing to do with the original problem.
It travels through fear, forced selling, and interconnected debt. Investors lose money in one place, sell other assets to cover losses, and the selling spreads. Correlations that were 0.3 become 0.9 overnight.
Right now there are 3 contagion pressures colliding:
1. The Iran war closed the Strait of Hormuz. Oil spiked. Energy costs hit every sector, every supply chain, every airline, every manufacturer globally.
2. Tariffs are still unwinding through global trade, hitting emerging markets hardest.
3. Stocks and bonds are moving together, not opposite. That breaks the classic hedge.
The IMF is calling contagion risk "decisively on the downside." Markets are betting the war ends fast. If it doesn't, the dominos get more interesting.