Middle East Markets Diverge as US-Iran Ceasefire Deal Remains Uncertain

Stock markets across the Middle East exhibited mixed reactions this Sunday, May 31, 2026, as investor confidence was swayed by the continuing uncertainty surrounding a potential ceasefire extension between the United States and Iran. While Saudi Arabia's main bourse saw gains, Qatar's index experienced a decline.

A key factor influencing market sentiment is the protracted negotiation process regarding an agreement that would extend the current ceasefire and lift restrictions on shipping through the strategic Strait of Hormuz. Iran's chief negotiator, Mohammad Baqer Qalibaf, stated on Sunday, according to state media, that Iran would only agree to conclude its conflict with the U.S. if the rights of the Iranian people were unequivocally protected.

U.S. President Donald Trump has yet to make a definitive announcement on the tentative agreement. However, sources close to the negotiations, who spoke to Reuters, indicated that President Trump has affirmed he will soon decide on the matter.

Regional Market Performance

In Saudi Arabia, the benchmark index (.TASI) recorded a 0.5% increase by the close of trading, reaching 11,078. This rise followed a five-session holiday break. Noteworthy contributions to the positive performance came from Al Rajhi Bank (1120.SE), which saw its shares climb by 1%. Conversely, the oil giant Saudi Aramco (2222.SE) experienced a 1.3% dip, reflecting broader concerns in the energy sector.

This slight downturn in Aramco's stock follows a significant drop in oil futures on Friday, which fell by over 2%. This marked oil's sharpest weekly loss since early April, as traders anxiously awaited confirmation of a ceasefire pact involving the U.S., Israel, and Iran.

Meanwhile, Qatar's main index (.QSI) moved in the opposite direction, declining by 0.4% to stand at 10,555. The petrochemical producer Industries Qatar (IQCD.QA) was a primary contributor to this fall, with its shares sliding by 1.7%.

Other regional markets, including those in Egypt, Bahrain, and Kuwait, remained closed for the Eid holiday, thus not participating in Sunday's trading activity. Oman's index (.MSX30) also saw a slight decrease of 0.2%, closing at 7,757.

The divergent market performances underscore the sensitivity of Middle Eastern economies to geopolitical developments, particularly those involving major regional and global powers such as the U.S. and Iran. The outcome of the ceasefire negotiations is poised to significantly impact stability and economic trajectory in the region.