Most Gulf stock markets rose at the beginning of trading on Monday, after statements by US President Donald Trump in which he indicated the exclusion of launching new military strikes on Iran, at a time when negotiations aimed at ending the war that has been ongoing for eight months continue.
The Saudi main market index, TASI, rose by 0.1 percent. Supported by the rise in “Al Rajhi Bank” shares by 0.6 percent, while the shares of “The Perfect Offer for Commercial Services” jumped by 7.7 percent, after the company announced an increase in its quarterly profits.
In the UAE, the Dubai Financial Market index rose by 0.8 percent. Supported by the rise in Emaar Properties shares by 3.2 percent, the Abu Dhabi Securities Market index also increased by 0.8 percent.
The Qatar Stock Exchange index rose by 0.4 percent. Supported by the rise in the shares of “Industries Qatar” petrochemical company by 1.8 percent.
Following the US midterm elections last week, Trump had hinted at the possibility of resuming attacks on Iran, but a large-scale US military operation was not carried out, while Tehran threatened to target American and Israeli sites in the event of a new attack.
The sharp decline in technology company stocks, with declining confidence in investing in artificial intelligence, raises concerns about the ability of global financial markets to withstand, from New York to Taipei, at a time when pressure is increasing on a number of indicators monitored by regulators and investors to monitor risks in the markets.
Although the Nasdaq 100 index, which is heavy on technology stocks, rose slightly more than 1 percent last Friday, it ended the week down 5 percent, amid continued anxiety among traders, according to Reuters.
Policymakers have long warned of the potential risks of the AI boom fading, while investors and regulators are closely monitoring signs of stress in markets, some of which have begun to trigger warning signals, although they have not yet reached danger levels.
Below are the most prominent indicators that markets are tracking:
High volatility indicators
The VIX index, known as Wall Street's fear index, which measures US stock market volatility, rose to more than 28 points on Thursday, recording the highest level since late March, before closing at just over 25 points on Friday.
Although this increase is still relatively limited, compared to the jump that the markets witnessed following the announcement of US tariffs in April 2025, known as “Liberation Day,” or the selling wave in August 2024, the index rose by more than 30 percent during the past week. The corresponding European index also recorded its highest level since May on Friday.
Idana Abio, portfolio manager at First Eagle Investments, said that it is still too early to assess developments, noting that the source of concern will be recording further jumps in volatility, worsening pressures, and the emergence of real problems in the ability to access markets, which are factors that she will monitor closely.
The high cost of hedging technology sector risks
One of the most prominent indicators that may portend turmoil in the artificial intelligence sector is the sharp rise in the cost of insurance against debt default.
The cost of insuring the debts of the company “Corowave”, which specializes in cloud computing, jumped to levels that reflect severe credit pressures, after spreads on five-year credit risk swap contracts exceeded 1,000 basis points, recording record levels. This indicator has become a measure of investor concern about the artificial intelligence sector.
The spreads on credit risk swap contracts for SpaceX and Intel also increased during the past week.
In the same context, the additional return required by investors to hold high-yield US corporate bonds, known as high-risk bonds, has risen to its highest levels since the “liberation day” unrest, with dealers’ appetite for riskier assets declining.
As for the riskiest segments of the market, related to companies rated at “CCC” or lower, this additional return approached its highest levels since 2020, according to “ICE Bank of America” indicators.
Demand for safe havens
Investors' trend toward safe havens is a clear indication of escalating anxiety in the markets, even though daily movements are still relatively limited.
Ten-year US Treasury bond yields fell by about 50 basis points, compared to peak levels of more than 5 percent recorded last month, amid concerns about rising debt, inflation, and increased competition for financing, with technology companies intensifying their bond issuances.
In the currency markets, movements remained relatively limited, but there were signs of increased investor interest in the US dollar, which rose on Friday by about 0.8 percent, recording its largest daily gains since June.
Three-month cross-currency basis swap contracts for the euro against the dollar briefly touched a level of negative 8 basis points last Thursday, the lowest since late 2023, indicating increased demand for financing in dollars, before recovering to about negative 3.5 basis points by Monday.
In another indication of growing caution, the “Flow Show” report, issued by Bank of America, last Friday, stated that monetary funds attracted inflows amounting to $140 billion during the week ending on Wednesday, in the seventh largest weekly inflows on record.
Bond markets remain stable
On the other hand, bond markets do not yet show signs of the pressures they witnessed during the “Covid-19” pandemic, or in the wake of the customs duties announced within the framework of “Liberation Day.”
The MOV index, which measures fluctuations in the US Treasury bond market, recorded its highest level in six months last October, but has declined since then.
Other bond market indicators, including US interest swap spreads, which can reflect funding and liquidity pressures, have remained stable so far.
A survey, the results of which were published on Monday, showed that the British labor market witnessed a slowdown last October, with the pace of employment in permanent jobs declining for the first time in four months, while starting salaries for these jobs rose at a faster pace.
The monthly survey, conducted by the British Employment and Employment Authority, in cooperation with KPMG, showed a decline in hiring for permanent and temporary jobs, amid companies’ concerns about economic conditions and rising costs, according to Reuters.
John Holt, CEO of the group and senior partner of KPMG in Britain, said that companies will evaluate whether the measures announced in the budget provide them with sufficient stability to face external pressures and rising costs.
He added that the Bank of England's increase in interest rates, along with continued expectations of rising inflation in the coming months, may hinder the signs of improvement that have begun to appear in the labor market.
The index for permanent job appointments fell to 46.6 points in October, from 50.9 points in September, recording the lowest level since May. The temporary employment index also fell to 48.9 points, from 50.9 points, its first decline since March.
In contrast, the number of candidates available for permanent and temporary positions increased slightly, while permanent vacancies recorded the slowest pace of contraction since August 2024, compared to a limited increase in temporary positions.
The Bank of England raised interest rates by a quarter of a percentage point to 4 percent last week, warning that the continuation of the US-Iranian conflict may require at least one more increase. Investors expect interest rates to rise at least twice, by 25 basis points each, during 2027.
The survey included about 400 companies specialized in employment and labor consulting, and was conducted between October 12 and 26, before Finance Minister John Healey announced the budget on October 28, which made no significant change in growth or inflation expectations.
