Current A-share pricing maintains room for both upside and downside risks, reflecting a neutral but not yet stable pricing level. The market continues to adjust medium-term scenario assumptions and probability distributions significantly in response to catalysts from the US-Iran conflict. Short-term market volatility remains elevated, indicating it is not yet the time for heavy positioning. Medium-term macro scenarios are gradually converging but still lack a final critical convergence. Even if the US initiates ground operations, a relatively swift withdrawal is expected. Should this key convergence materialize, the peak impact of the US-Iran conflict on capital markets would likely pass, potentially leading to a bottoming and recovery in risk appetite.
In the short term, the market remains highly sensitive to developments in the US-Iran conflict, leading to substantial revisions in medium-term outlooks. This is evident in sustained high volatility and suppressed risk appetite, suggesting it is premature to make significant bets based on medium-term projections.
While medium-term macro scenarios have not fully converged, some consensus is emerging, with three key points being most critical. Firstly, it is widely agreed that US-Iran tensions will be a medium to long-term issue, and market pricing for mid-term assets has already reflected some of this shift. Secondly, expectations for medium-term monetary policy are becoming more objective. The Federal Reserve must address rising inflation pressures while simultaneously managing a weaker labor market and promoting manufacturing reshoring. Analysis suggests the US economy is more prone to stagnation than inflation under cost shocks. A baseline expectation is for the Fed to hold rates during stagflation-like conditions and cut rates during recession-like phases. Confirmation of a stagflation outlook as the base case would likely require clarity on monetary policy direction around May, following commentary from officials. Thirdly, the US government's assessment of potential amphibious operation objectives—avoiding protracted conventional war, achieving tactical goals swiftly, and withdrawing promptly, leaving the Middle East order with unresolved elements—does not fundamentally differ from capital market expectations. The primary source of current medium-term uncertainty is the scenario following any US initiation of ground operations. If a short-term operation achieves tactical objectives and leads to a rapid withdrawal, it would constitute the critical convergence for the medium-term macro scenario. Consequently, the period of greatest impact from the US-Iran conflict on capital markets would end, risk appetite could rebound from its lows, and the medium-term bottom for the A-share market would likely be confirmed.
A significant medium-term low may be approaching, contingent upon a secondary market bottom materializing, key macro scenario convergence occurring, and steady, long-term policy support taking effect. The outperformance of value over growth stocks overseas began around November 2025, while in the A-share market, it started in mid-January 2026. This shift, evolving from natural sector rotation and style shifts to thematic HALO trades and now the US-Iran conflict, has significantly improved the relative attractiveness of growth stocks.
New economy sectors and strategic resources remain assets for an era of inflation. Once the peak impact of the US-Iran conflict subsides, the effectiveness of bottom-up stock selection will gradually return. This time, the market bottom is also likely to coincide with a bottom for the small-cap growth style.
Following the emergence of a medium-term low, the market is expected to return to a "two-phase rally" path. The "consolidation and correction phase between the two rallies" is likely to persist for some time, awaiting the accumulation of positive fundamental signals and the digestion of valuations through earnings growth and time. A "second-phase rally" is still anticipated for 2026-2027, potentially starting in Q4 2026, contingent upon transformative industrial trends, renewed consensus on market structure, and a virtuous cycle of赚钱效应 attracting incremental funds. This phase would be characterized by a resonance of improving fundamentals and liquidity, fully unlocking upward potential.
During the consolidation phase between the two rallies, high-elasticity investment opportunities will primarily stem from extensions of the technology theme and broadening macro narratives. In this stage, select sub-sectors may offer independent opportunities with elasticity, but broad sector coordination will be weak, making it difficult for赚钱效应 to spread widely. Technology sectors related to the "re-realization" theme that were strong prior to the US-Iran conflict, such as optical communications, gas turbines, and energy storage, may still present short-term opportunities. In the next stage, new energy, new energy vehicles, and the export chain are areas where improving景气 can be verified. While short-term hedging may be less effective initially, subsequent investments based on confirmed景气 improvement will remain a significant source of opportunity.
Risk warnings include overseas economic recession exceeding expectations and domestic economic recovery falling short of expectations.