In this study, we use molecular dynamics (MD) simulation to explore how Fe–Cr–Ni alloys change their structure when stretched or compressed from two directions at a steady rate and at room temperature. Bi-axial tensile deformation causes changes in stress, creates stacking faults and dislocations, and leads to a change from FCC-to-BCC phase, forming networks of stacking faults that are rectangular and square-shaped. In contrast, when materials are squeezed from two sides, they quickly become unstable, leading to a fast increase in dislocations, which then disappear and rearrange. The FCC-to-BCC transformation starts sooner during compression, creating a mix of FCC and BCC structures with a lot of twinning and honeycomb-like dislocation patterns close to failure. These results highlight the distinct deformation mechanisms under bi-axial loading, emphasizing phase transformation and dislocation dynamics in mechanical behavior. Understanding atomic-level interactions between deformation and phase change is crucial for designing high-strength Fe–Cr–Ni alloys, addressing a key challenge in materials research.