Technology shares rebound, Gulf equities rally and oil prices retreat as diplomatic initiatives over Iran, Ukraine and Israel offer prospects of reduced geopolitical tensions.
Global financial markets showed signs of recovery at the end of a volatile week, with technology shares rebounding on Wall Street, Gulf equities recording strong gains and oil prices falling sharply as investors assessed prospects for diplomatic progress in the Middle East and Ukraine.
The improvement followed the November 3 US midterm elections, which gave Democrats control of both houses of Congress and raised expectations of changes in Washington’s approach to the Iran conflict. However, renewed military threats and uncertainty over US interest rates prevented the recovery from extending across all markets.
Wall Street Rebounds After Technology Rout
The Nasdaq Composite gained 1.1% on Friday, November 6, recovering part of Thursday’s 5.5% plunge, its steepest daily decline since April 2025. The sell-off was driven by companies exposed to artificial intelligence infrastructure, with Micron Technology and Advanced Micro Devices each losing about 17%, Broadcom falling 10.4% and Nvidia dropping 9.3%. SanDisk declined more than 22%, while data-centre power supplier GE Vernova lost 7.5%.
The declines reflected concerns that a Democratic-controlled Congress could tighten oversight of data-centre construction, slowing investment in AI infrastructure and weakening demand for semiconductors.
Friday’s rebound was led by renewed buying in chipmakers. Advanced Micro Devices gained approximately 11%, Micron rose 5% and Nvidia advanced nearly 3%. The S&P 500 gained 0.3%, although the Dow Jones Industrial Average slipped 0.5%.
Despite the recovery, the Nasdaq ended the week 3.4% lower and remained in correction territory, indicating that investor confidence had yet to recover fully.
Gulf Markets Rally as Oil Prices Retreat
Gulf equities recorded substantial weekly gains, supported by expectations that the US election results could encourage a diplomatic settlement with Iran.
Qatar’s benchmark index surged 10%, its strongest weekly performance in 12 years, while Dubai’s main index rose 4.4%, its largest weekly gain in more than six months.
Saudi Arabia’s benchmark advanced 1.8%, and Kuwait’s Premier Market Index gained 1.1%.
Dubai’s property sector received additional support from Emaar Properties’ proposed AED11.9bn acquisition of the remaining shares in Emaar Development.
Egypt also participated in the regional recovery, with the EGX30 gaining 2.83% on Wednesday and another 0.99% on Thursday, supported by stronger buying interest.
Oil markets offered a potentially significant economic benefit. Brent crude settled at $98.32 a barrel on Friday, declining approximately 13.3% over the week on a comparable January futures contract basis.
A sustained reduction in oil prices could ease inflation, energy-import costs and foreign-currency pressures in importing economies, including Egypt, while supporting transport, manufacturing and international trade.
For Gulf oil exporters, however, lower crude prices would reduce revenue per barrel, potentially offsetting some of the wider economic benefits of regional stability.
European markets showed selective resilience. The STOXX 600 gained 0.24% over the week, despite falling 1% on Friday, while France’s CAC 40 advanced approximately 2.1%.
Three Diplomatic Developments Offer Hope
Beyond the immediate recovery in financial markets, three political developments could influence global investor sentiment over the coming weeks.
The first is renewed US-Iran diplomacy through Qatar.
Iran has submitted a nuclear-related proposal to Washington through Qatari mediators, Reuters reported on November 5, opening another potential route towards ending the eight-month conflict.
The proposal follows discussions in Doha aimed at reducing hostilities, restoring commercial navigation through the Strait of Hormuz and addressing sanctions and Iran’s nuclear programme.
However, Tehran continues to insist that Washington first meet several conditions, including sanctions relief and the release of frozen assets, before substantive nuclear negotiations can proceed.
No settlement has been reached, but a breakthrough could reduce geopolitical risks affecting energy supplies, international shipping and Gulf investment.
The second development is the resumption of Ukraine-Russia peace negotiations.
US-mediated talks are scheduled for November 10–11 in Abu Dhabi, focusing on security guarantees, possible ceasefire arrangements, energy infrastructure and Black Sea trade.
German Chancellor Friedrich Merz has welcomed renewed negotiations while insisting that Russia demonstrate a genuine commitment to peace and that Europe participate in decisions affecting its security.
European governments have nevertheless rejected suggestions that Washington and Moscow could independently determine a broader European security settlement.
An agreement protecting Ukraine’s sovereignty while addressing European security concerns could reduce geopolitical uncertainty, improve trade conditions and create opportunities for reconstruction investment.
The third development is Israel’s potential political transition.
Israeli President Isaac Herzog announced on November 7 that he would give former military chief Gadi Eisenkot, leader of the Yashar party, the opportunity to form a government after the October 27 election left no political bloc with a parliamentary majority.
Eisenkot received recommendations from factions representing 67 lawmakers, against 46 for Prime Minister Benjamin Netanyahu. However, those endorsements do not constitute an agreed governing coalition.
A successful transition could create an opportunity to revive cooperation on the stalled US-backed Gaza peace plan, particularly over reconstruction, Israeli withdrawal and security arrangements.
The outcome remains uncertain. Eisenkot must assemble a viable parliamentary majority, while major differences persist over Gaza, Lebanon and Iran.
Renewed Military Threats Cloud the Outlook
The potential economic benefits of diplomacy remain vulnerable to continuing military escalation.
Saudi Arabia’s benchmark fell approximately 1% and Qatar’s index declined 1.3% in early Sunday trading, according to Reuters, as reports of explosions in southern Iran, incidents involving oil tankers and renewed threats to regional shipping unsettled investors.
The retreat did not erase the preceding week’s substantial Gulf gains, but demonstrated how quickly security concerns can interrupt improving investor sentiment.
Washington has threatened further conventional strikes against Iranian nuclear facilities if negotiations fail, while Iranian officials have warned that renewed attacks could prompt retaliation against undersea communications cables linking regional and international digital networks.
President Donald Trump has explicitly ruled out using nuclear weapons against Iran, but the possibility of renewed conventional warfare remains a significant market risk.
In Ukraine, continued Russian missile and drone attacks, alongside Ukrainian strikes on Russian targets, have raised doubts about whether the forthcoming Abu Dhabi negotiations can produce a durable ceasefire.
Israel’s political uncertainty adds another complication. Although a new government could offer a different approach to regional diplomacy, continued military operations in Gaza and pursuit of regional war could undermine peace efforts.
Financial conditions provide an additional challenge. The US economy added 165,000 jobs in October, strengthening expectations of another Federal Reserve interest-rate increase and potentially raising borrowing costs for businesses and emerging economies.
World Leaders Hold the Key to the Next Market Recovery
The contrasting developments reveal a global economy approaching a potentially important turning point.
Rebounding technology shares, stronger regional equities and declining oil prices suggest that investors remain willing to return to riskier assets when prospects for stability improve.
Progress in US-Iran negotiations, a credible Ukraine ceasefire and renewed implementation of the Gaza peace plan could reinforce that confidence, reduce trade and energy disruptions and improve the environment for international investment.
For Egypt and other emerging economies, the potential benefits include lower import costs, improved investor sentiment, more predictable shipping routes and easier access to international financing.
Yet the recovery remains conditional on political decisions rather than market performance alone.
The coming weeks will test whether world leaders can convert diplomatic openings into enforceable agreements, or whether continued military escalation will keep investors cautious.
The direction of global markets increasingly depends not only on corporate earnings and interest rates, but also on decisions taken by World leaders in the coming weeks.
Those decisions could determine whether the latest rebound becomes the beginning of a broader economic recovery or another temporary rally interrupted by geopolitical uncertainty.
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