Middle Eastern stock markets suffered a fresh wave of heavy losses following a steep decline in Asian equities, as President Trump’s aggressive tariff strategy triggered global panic and oil prices slumped.
The ripple effects of escalating global trade tensions slammed Middle Eastern financial markets on Monday, extending what has become the region’s worst stock rout in half a decade. Following a sharp selloff in Asia, investors in the Gulf and wider MENA region reacted with alarm to U.S. President Donald Trump’s sweeping import tariffs and the resulting shockwaves hitting energy prices.
Saudi Arabia’s Tadawul Index dropped another 2.7% by late morning UAE time, compounding Sunday’s nearly 7% crash. The Dubai Financial Market Index fell over 6%, and Abu Dhabi’s Securities Index lost 4.48%. Smaller drops were recorded in Kuwait, Bahrain, and Qatar, each retreating by around 1-2%.
Of the 253 companies listed on Saudi Arabia’s Tadawul exchange, 250 ended in the red, underscoring the severity of investor unease. Energy, banking, and real estate sectors led the plunge. Adnoc Gas nosedived 9%, Aldar Properties shed 8%, while Abu Dhabi’s top lenders—ADCB and FAB—dropped 8.4% and 5.2%, respectively. Even oil giant Saudi Aramco, which had tumbled nearly 5% the day before, was still slightly down.
“The market response has been sharply negative. A 10% baseline tariff across the board, with much steeper penalties for major economies, caught many off guard,” said Edward Bell of Emirates NBD.
Analysts warned that volatility would now define the region’s investment climate. Vijay Valecha of Century Financial pointed to Dubai’s past strong performance as a reason for heightened sensitivity, saying the index could swing more dramatically than its regional peers.
The global economic slowdown, fears of a trade war-induced recession, and falling oil prices are forming a perfect storm. “We’re seeing the early signs of a synchronized downturn,” said Monica Malik of ADCB, noting that while China’s retaliatory tariffs appear strategic, they only deepen investor fears.
Trump’s new tariff framework is unprecedented in scope—imposing a minimum 10% duty on all trading partners, with punitive rates for some of the largest U.S. counterparts. China faces a 34% rate, the EU 20%, India 26%, Japan 24%, and South Korea 25%. For smaller, often overlooked economies, the figures are even more severe: Syria (41%), Iraq (39%), Libya (31%), and Algeria (30%).
The initial 10% blanket tariffs began on April 5, with individual country-specific rates scheduled to take effect on April 9. China’s countermeasures, mirroring the 34% rate, are due to commence April 10.
The impact has spilled into U.S. markets as well. Futures pointed downward, with the S&P 500, Dow Jones, and Nasdaq expected to open 3-4% lower. The U.S. dollar slumped against major currencies, and Treasury yields tumbled as investors now anticipate up to four interest rate cuts in 2025 despite inflationary pressures.
As the global financial system braces for a drawn-out trade conflict, market sentiment remains fragile and heavily risk-averse. In the Middle East, economic uncertainty and falling oil revenues may further pressure fiscal policy and investor confidence in the weeks ahead.
