Markets across the Middle East plunged into red territory Sunday, following U.S. President Donald Trump’s shock announcement of sweeping new tariffs that sent global investors into risk-off mode.
Saudi Arabia’s Tadawul index fell nearly 7%, marking its steepest one-day loss since the early days of the Covid-19 pandemic. The broader regional rout saw stock exchanges in Qatar (-4.2%), Kuwait (-5.7%), UAE, Egypt, Jordan, and Israel follow suit.
Billions of dollars in market value were wiped out within hours of the U.S. move, which targeted nations based on bilateral trade deficits and was branded as a “reciprocal tariff system.”
“This was a body blow to markets already nervous about global demand,” said a Dubai-based fund manager who requested anonymity. “The oil drop just poured fuel on the fire.”
Tadawul’s $133 Billion Meltdown
Saudi Arabia’s Tadawul lost $133 billion in market capitalization on Sunday alone, according to Al-Eqtisadiah, the kingdom’s top financial daily. Blue-chip oil giant Aramco dropped 5.3%, wiping billions off its valuation.
Across the Gulf, fears of a broader capital flight intensified, particularly among foreign investors who had re-entered the region following strong earnings in Q1.
Major Index Losses – April 6, 2025
| Country | Exchange | % Change |
|---|---|---|
| Saudi Arabia | Tadawul | -6.78% |
| Qatar | QE Index | -4.20% |
| Kuwait | Premier Market | -5.70% |
| UAE | ADX, DFM | -3.50% |
| Egypt | EGX30 | -3.10% |
| Jordan | ASE | -2.80% |
| Israel | TA-35 | -2.25% |
Oil Prices Tumble in Tandem
Brent crude slid to $71.60 per barrel, down 6.4% in intraday trading, amid fears the tariffs will suppress global trade flows and demand forecasts. Analysts noted that the tariffs — particularly on industrial inputs and intermediate goods — risk triggering a chain reaction of inflationary pressures and growth downgrades.
“This is as much about sentiment as fundamentals,” said Lina Mahfouz, MENA analyst at Citadel Strategies. “Markets are front-running a potential recession in global trade.”
Winners and Losers in the Tariff Map
According to internal White House documents seen by Middle East Eye, countries were assigned tariff rates on a sliding scale, based on trade imbalances and tariff reciprocity.
Notable Tariff Allocations:
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10% baseline: UAE, Saudi Arabia, Egypt, Turkey, Qatar, Lebanon, Jordan
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Exemptions: Iraq, Libya, Algeria (due to oil & fuel waivers)
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High impact: Israel, Tunisia, Jordan (non-energy exports targeted)
This new policy — which affects business, electronics, textiles, and even some agri-exports — has drawn swift rebukes from regional leaders. But Washington shows no sign of softening its stance.
Investor Sentiment: ‘Deeply Rattled’
Market participants fear this could be the opening shot in a broader trade recalibration reminiscent of Trump’s first term. The sudden nature of the announcement — which came via a late Friday press briefing — gave traders little time to hedge exposure or reprice risk.
“There’s panic selling, no question,” said Rana El-Khatib, a trader at Bahrain-based Durrat Investments. “But we may not have hit the bottom yet.”
What Comes Next?
While analysts expect a degree of technical rebound in the coming days, most agree that tariff-linked uncertainty will continue to cast a shadow on regional equities — especially in trade-dependent economies like the UAE, Jordan, and Egypt.
Key Risk Factors to Watch:
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U.S. tariff enforcement schedule
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GCC diplomatic response
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OPEC+ reaction to oil market slump
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Possible IMF intervention for trade-exposed nations
With fragile global sentiment and falling commodity prices, the Middle East faces a new reality — where geopolitics and trade wars may matter just as much as fundamentals.
