The stalemate in US-Iran tensions continues to pressure risk appetite, while funds that supported the "first phase of the rally" are experiencing a short-term, concentrated withdrawal. This includes shrinking industry ETF scales, pension funds reducing positions to avoid net value losses, and "fixed-income plus" products cutting positions and facing redemptions. These factors suggest that the current period may represent the peak of market pressure. Policy measures aimed at achieving steady, long-term growth are to be expected. However, attention should be paid to potential differences between the sectors targeted by these policies and the sectors being reduced by absolute return funds, which could constitute a tail risk.

Mid-term uncertainties remain underestimated. First, for both the US and China, monetary tightening is a suboptimal response to imported inflation. Increasing tolerance for inflation is highly probable. Second, the US economy shows resilience, while China's economy has room for maneuver; a recession is not the baseline assumption. Third, amid geopolitical stalemates, China's energy security and supply chain security could emerge as global alpha opportunities. Even if US-Iran conflicts seesaw in the mid-term, their impact on A-shares is likely to gradually diminish.

The US-Iran conflict has reached a stalemate, with insufficient preparation across sectors for a new Middle East order. Establishing a new balance will require prolonged negotiation, leading to repeated short-term event-driven disruptions that directly pressure capital market risk appetite. Short-term market projections of the US-Iran conflict's impact primarily draw analogies to the two oil crises: rising oil prices and freight costs lead to increased inflation, monetary tightening, economic recession, confirmation of a stagflation cycle, and a simultaneous decline in stock market fundamentals and valuations. This logic chain is difficult to disprove in the short term. Meanwhile, funds that supported the "first phase of the rally" are showing signs of concentrated withdrawal: industry ETF scales are contracting, particularly in sectors like non-ferrous metals, chemicals, computers, and media. Absolute return funds, with rapidly narrowing floating profits, are forced to reduce equity positions to avoid principal losses. Pension funds, which significantly increased equity positions earlier, are seeing reduced stability in their high allocations. Based on the holdings of active mutual funds and "fixed-income plus" products, sectors like non-ferrous metals, chemicals, communications, and electronics may face selling pressure. As allocation-focused funds increased equity exposure mainly through "fixed-income plus" products, short-term redemption pressures are beginning to emerge. Given this concentrated fund withdrawal, policy support for steady, long-term growth is reasonable. Investors should monitor potential mismatches between the sectors benefiting from these policies and those being sold by absolute return funds. Overall index risk appears controllable, but structural impacts may still carry tail risks.

Mid-term, the A-share market is in a consolidation phase between "two stages of rally." Short-term, the market may follow a pattern of "oversold conditions → policy support for steady growth → rebound." The market is expected to continue range-bound movement, with leadership rotating. During phases with clear thematic opportunities—such as short-term rallies in energy storage and optical communication driven by strong performance validation—the market may test the upper bound of the range. Conversely, if thematic sectors stall after a rebound, the market may test the lower bound.

Short-term, structural recommendations continue to focus on "emphasizing reality," with CPO and energy storage standing out as strong directions. Under energy cost pressures, new energy and new energy vehicles, benefiting from energy diversification and anti-fragile supply trends, may join traditional energy as key strategic resources. Additionally, sectors likely to participate in the "second phase of the rally"—such as the AI industry chain and cyclical sectors with price increases—can be accumulated on pullbacks, though short-term timeliness is limited. Historical experience suggests that the style characteristics of two-phase rallies are consistent. During the intervening consolidation period, the style is not about switching from high to low valuations but rather involves diffusion within thematic sectors. High-elasticity investment opportunities mainly come from extensions of thematic assets and expansions in macro narratives.

Currently, the "emphasizing reality" theme is expected to persist at least until the first-quarter earnings season. Subsequent AI industry trends may shift from hardware to application focus. Opportunities include application enablers (cloud computing, edge devices, robotics), late-mover advantages in the domestic AI chain (links to major domestic tech firms), and AI-driven transformation of traditional industries (contrary to the HALO trade). Macro narrative expansion should focus on potential repricing driven by shifts in relative national strength, which could catalyze a reassessment of manufacturing sectors.

Risks include overseas economic recession exceeding expectations and slower-than-expected domestic economic recovery.