On July 4, Fitch Ratings released a report stating that despite the temporary memorandum of understanding signed between the U.S. and Iran on June 17, both sides continue to engage in retaliatory military strikes. The agreement remains fragile and Israel is not involved, which keeps the situation in the Middle East a risk for global businesses. In its updated 'negative scenario' analysis, Fitch pointed out that even if the currently set extreme scenarios (such as a 10% drop in the stock market, a widening of corporate bond spreads by 100-200 basis points, tightening monetary policy, and a noticeable slowdown in the global economy) do not fully materialize, they can still serve as a reference in the event of escalating conflict. In this scenario, the economic growth rates of the U.S. and the Eurozone would significantly decline. Fitch assessed 72 industry sub-sectors across six global regions, with most risk assessments remaining unchanged, while a few were adjusted up or down. Overall, Fitch believes that the 'tail risks' of the Middle East conflict persist, and if the situation escalates again, it will continue to exert pressure on the global corporate credit environment and financial markets.