IIS Express Broken After Parallels Desktop 26.1.1 Update

After updating to Parallels Desktop 26.1.1 (build 57288) on my ARM-based Mac, I'm experiencing persistent issues with IIS Express inside a Windows VM. Specifically:
  • IIS Express fails to serve requests reliably, often resulting in connection reset errors.
  • The issue seems tied to changes in network adapter behavior introduced in the update.
  • I'm running in a corporate environment with CyberArk EPM, which may be interfering with port access or loopback connections.
  • Switching network modes (Shared, Bridged, Host-Only) hasn't resolved the issue.
  • I could also no longer connect to my Ubuntu SQL Server VM, but resolved that by installing SQL 2025 locally.
 
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