---
title: "Dongwu Securities: Beware of the chain reactions brought by the \"prolonged conflict\" and recommend three response paths for technology + energy positions"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/278252928.md"
description: "Soochow Securities Co., Ltd. released a research report indicating that the impact of geopolitical events on major asset classes is usually a short-term disturbance. However, the Russia-Ukraine conflict in 2022 led to a medium-term rise in oil prices, affecting A-shares. The report suggests three response paths for technology and energy holdings, believing that the technology industry and liquidity environment in 2026 will be similar to that of 2022, facing pressures of mismatched growth momentum and capital expenditure. At the same time, geopolitical factors will disturb inflation expectations, potentially affecting the interest rate cut process"
datetime: "2026-03-08T08:48:03.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/278252928.md)
  - [en](https://longbridge.com/en/news/278252928.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/278252928.md)
---

# Dongwu Securities: Beware of the chain reactions brought by the "prolonged conflict" and recommend three response paths for technology + energy positions

According to the Zhitong Finance APP, Soochow Securities released a research report stating that based on historical reviews since 2015, geopolitical events often have a short-term disruptive effect on major asset classes, which can be fully digested by the market within a week and will not become the core factor driving the trends of major asset classes. However, the Russia-Ukraine conflict in 2022 broke this common pattern, as the war unexpectedly evolved into a "protracted war," leading to a mid-term rise in oil prices and creating a new transmission path for A-shares: rising oil price center — input inflation expectations — marginal tightening of Federal Reserve policy — worsening dollar liquidity — pressure on A-shares. The transmission path of this round of conflict on A-shares may have certain similarities with the Russia-Ukraine conflict.

## **The main points of Soochow Securities are as follows:**

**The trends in the technology industry and liquidity environment in 2026 have certain similarities to those in 2022.**

**In terms of industry trends, during the Russia-Ukraine conflict in 2022 and the escalation of the Middle East situation in 2026, the core technology growth sectors are facing pressure from mismatched growth momentum and capital expenditure.** In 2022, the new energy industry transitioned smoothly from a high-speed growth phase to a mature phase, with a weakening of prosperity. Currently, the penetration rate of AI Agents is rapidly increasing, but the deep application in the downstream real economy has not yet been scaled, and a complete commercial closed loop has not been established, leading investors to question whether the continued high expenditure in the upstream computing hardware sector can yield profits.

**In terms of liquidity, both 2022 and 2026 are in a transitional period of significant liquidity shifts.** 2022 marked the beginning of the Federal Reserve's interest rate hike cycle, with liquidity shifting from extreme ease to rapid tightening, primarily due to the excess liquidity brought about by large-scale fiscal subsidies in the U.S. after the pandemic, compounded by the impact of the Russia-Ukraine conflict on energy and food supply, driving inflation "upward." By 2026, it will be at the tail end of a loosening cycle, with absolute interest rates remaining high. High fiscal deficits will exert continuous upward pressure on inflation, while geopolitical factors will further disrupt inflation expectations, potentially leading to a "pause" in the interest rate cut process.

**How did the market perform in 2022? What insights does it provide?**

**At that time, the performance of A-shares can be divided into three stages, and the rhythm of the market in 2022 has important implications for the present:**

First, if the current oil price changes have a comparable impact on inflation as in 2022, then rising oil prices may prompt the market to reassess the logic of technology growth stocks, putting them under pressure.

Second, the transmission of rising oil prices to inflation expectations and interest rate hike expectations is not "immediate." Coupled with the complex influence of multiple factors on A-shares, the market's trading on this logic may experience phase-specific emphasis and retraction. During this process, certain sub-sectors within the industry trends may still generate phase-specific excess return opportunities due to structural logic, similar to the performance of energy metals and photovoltaic inverters in May-June 2022.

**Current market stage, core contradictions, and response strategies**

**From a medium to long-term perspective, it is necessary to be wary of the chain reactions brought about by the "prolongation of conflict."** The complexity of the current situation exceeds expectations, and the actual course of the war may surpass U.S. expectations and previous mainstream market judgments. Therefore, it is necessary to think in advance about a possibility: if a long-term conflict similar to the Russia-Ukraine war occurs, what impact will it have on the market? Especially considering the current market's industrial trends and liquidity environment, which share many similarities with 2022, we must be vigilant about the potential disturbances and risks that this long-term conflict may bring. Of course, this is just a worst-case scenario and not necessarily a baseline judgment; the core remains to prepare for risk assessment and response in advance.

**Analogous to 2022, oil prices will become the core pricing contradiction in the subsequent market.** In the past, the market was in an environment of a weak dollar, favorable interest rate cut expectations, and clear industrial trends. If oil prices continue to rise, it will break the weak dollar pattern and even force policies back to tightening. If the dollar returns to an upward trend, it will significantly suppress the market, especially growth styles. Currently, although Trump has publicly stated his intention to stabilize oil price expectations, and with the midterm elections approaching in the second half of the year, the tolerance for rising inflation is relatively low, his actual determination and capability to control the situation and oil prices remain to be observed. In the medium term, the fluctuations of this core variable, oil prices, have not yet converged, and we need to pay close attention to the war situation and oil price changes.

**In terms of strategic response, the core observation is the trend of oil prices, and it is recommended to divide into three paths:**

1.  Neutral strategy adopts technology + energy hedging. If the conflict does not escalate and oil prices remain volatile, the "HALO trade" at both ends is expected to outperform, focusing on hard technology in the AI industry "new infrastructure" and resource products.
    
2.  Risk-averse strategy reduces the proportion of technology allocation. If the conflict prolongs and the Strait of Hormuz remains blocked, leading to high oil prices, it will break the weak dollar pattern, compounded by the pressure of the AI industry facing mismatched growth momentum and capital expenditure, which may lead to adjustments in technology stocks.
    
3.  Aggressive strategy maintains technology positions. If oil prices rise rapidly and it is expected that the U.S. will "intervene to suppress," then one can speculate on "oil price decline → interest rate cut expectations repair → technology rebound."
    

**Risk Warning:** Economic recovery pace is slower than expected; policy advancement is slower than expected; geopolitical risks; uncertainties in overseas policies, etc

### Related Stocks

- [000300.CN](https://longbridge.com/en/quote/000300.CN.md)
- [159591.CN](https://longbridge.com/en/quote/159591.CN.md)
- [159309.CN](https://longbridge.com/en/quote/159309.CN.md)
- [561760.CN](https://longbridge.com/en/quote/561760.CN.md)
- [512550.CN](https://longbridge.com/en/quote/512550.CN.md)
- [561360.CN](https://longbridge.com/en/quote/561360.CN.md)
- [159731.CN](https://longbridge.com/en/quote/159731.CN.md)

## Related News & Research

- [China's Q1 GDP grows 5.0% y/y, tops market forecast](https://longbridge.com/en/news/282922369.md)
- [Mixed China data highlight fragile recovery outlook: retail sales sad, industrial beat](https://longbridge.com/en/news/282924837.md)
- [Iran war upends IEA's global oil market outlook](https://longbridge.com/en/news/282650437.md)
- [Iranian sanctioned supertanker crosses Hormuz Strait despite US blockade, Fars reports](https://longbridge.com/en/news/282819126.md)
- [EXCLUSIVE-Iran offers proposal allowing ships to exit Oman side of Hormuz free of attack, source says](https://longbridge.com/en/news/282883211.md)