--- title: "Financial Research Report: Middle East Conflict Triggers Market Trading \"Stagflation-like\" Logic" type: "News" locale: "en" url: "https://longbridge.com/en/news/281205750.md" description: "Huang Hongwei, the chief analyst of the Research and Development Center of Caixin Securities, stated that the market is expected to maintain a volatile consolidation trend before the end of April, with a solid foundation for the A-share market. The conflict in the Middle East will have a short-term impact on market sentiment but will not change the market direction. Technical analysis shows that the SSE Index exhibits bearish characteristics, and the market bottom pattern may be a \"V-shaped reversal\" or \"volatile bottoming.\" The subsequent market development direction may be a self-stabilizing recovery, with technology and price increase sectors being the main investment directions. The market is currently trading on a \"quasi-stagflation\" logic and has not yet transitioned to the \"stagflation\" phase" datetime: "2026-03-31T14:25:07.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/281205750.md) - [en](https://longbridge.com/en/news/281205750.md) - [zh-HK](https://longbridge.com/zh-HK/news/281205750.md) --- # Financial Research Report: Middle East Conflict Triggers Market Trading "Stagflation-like" Logic △Image description: Huang Hongwei, Chief Analyst of Macroeconomic Strategy at Caixin Securities Research and Development Center (Practicing Certificate No.: S0530519010001) "Before the end of April, the market is expected to likely maintain a volatile consolidation pattern, and a trending market still needs to wait," this is Huang Hongwei's overall strategic view on the market this week. Huang Hongwei emphasized: The foundation of this round of A-share market remains solid, and the current Middle East conflict is expected to only affect the short-term sentiment and market operation rhythm of the A-share market, without changing the market direction. In terms of technical analysis, Huang Hongwei suggests paying attention to the bottom formation indicators of the A-share market. Since mid to late March, the moving average of the SSE Index has shifted from convergence to divergence, showing bearish characteristics in the market index. Historically, market phase bottoms can generally be divided into two types: V-shaped reversals and volatile bottoming. The "V-shaped reversal" usually occurs against a backdrop of sharp changes in sentiment or external events, characterized by a short duration at the bottom and low probability of occurrence; "volatile bottoming" typically occurs against a backdrop of slow changes in sentiment or external events, characterized by a long duration at the bottom and high probability of occurrence. Specifically regarding the impact of the current "Middle East conflict," the subsequent "V-shaped reversal" can be further divided into two types: one is under sharp changes in sentiment, observing whether there is a repair under panic, with a focus on tracking whether the CSI 1000IV (volatility indicator) reaches 40 points; the second is under sharp changes in events, observing the evolution of the US-Iran situation, with a focus on tracking international oil price trends; the subsequent "volatile bottoming" can also be divided into two types: one is market self-stabilization and repair, which usually experiences a volatile consolidation period, with a focus on tracking the "index not making new lows for three days" pattern; the second is the continued function of "quasi-stabilization funds," tracking whether the four key CSI 300 ETFs see increased volume. "We believe that the market's self-stabilization and repair under volatile consolidation is likely the direction of the subsequent market development." Huang Hongwei also pointed out that from the perspective of performance, if the market index stabilizes and develops a trending market, the technology sector and price increase sector are expected to remain the two main lines of the market, with certain performance exceeding expectations in domestic computing power chains, AI applications, and chemical directions. The Middle East conflict is currently the most focused issue. Huang Hongwei believes that the market has begun to trade under a "quasi-stagflation" logic. Against the backdrop of a significant rise in international oil prices, the global market is still trading under the first phase of "inflation" expectations and has not yet transitioned to "stagflation" logic. The duration of the US-Iran conflict and when the Strait of Hormuz will be unblocked will be key to transitioning from "inflation" to "stagflation." Based on empirical rules, if the blockade of the Strait of Hormuz lasts for a month, the market may again expect the US-Iran conflict to persist, accelerating the "inflation" trade; if the blockade lasts for three months, the strategic oil reserves of major global economies will be stretched thin, and it cannot be ruled out that the market will begin to trade under "stagflation" logic In addition, Huang Hongwei also suggested paying attention to the bottom configuration opportunities in gold. Since the current round of Middle East conflicts, the price of crude oil and precious metals has mostly shown an inverse relationship. The underlying reason is that rising crude oil prices may increase inflation expectations, compressing the Federal Reserve's interest rate cut expectations. However, starting last Friday, both precious metal prices and crude oil prices have risen together, with gold prices beginning to desensitize, not falling in the face of negative news, and are expected to welcome a phase bottom. "We believe that the decline in dollar credit is the core support for the current round of commodity price increases, and gold is the best-performing commodity variety in terms of sustainability." 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