Overview:

Middle Eastern tensions intensified Wednesday and Thursday following renewed military operations between the United States and Iran, prompting widespread equity declines across major indices while crude oil climbed toward USD 80 per barrel. The escalation undermined investor sentiment globally, with the Standard & Poor's 500 falling and regional bourses including Dubai's index declining 1.5 percent. Concurrently, the International Monetary Fund lowered its 2026 global growth forecast to 3 percent, citing persistent geopolitical risks.

Details:

Oil markets responded sharply to the renewed hostilities, with Brent crude surging past USD 80 per barrel as threats to Hormuz Strait traffic and supply disruptions materialized. War risk insurance providers advised shipping companies to suspend transit through the strategic waterway pending developments. The United States Energy Information Administration reported rising crude inventories coupled with declining gasoline stocks in the week ending July 8.

Gold prices retreated to near-week lows, hovering below USD 4,100 per ounce, as inflation concerns and rising interest rate expectations pressured precious metals. Silver declined to USD 57.77. The dollar strengthened against major currencies, driven by heightened demand for safe-haven assets amid regional instability.

Domestically, the UAE continued demonstrating resilience in capital attraction. The nation attracted USD 48.3 billion in foreign direct investment during 2025, capturing 40.4 percent of Arab flows and ranking ninth globally with a cumulative stock of USD 1.17 trillion. Dubai's first-quarter gross domestic product reached AED 232 billion, with financial activities contributing 37 percent of growth. The Oman Minerals and Trading Holding Company's inaugural public listing surged 18.6 percent on its debut trading session, with demand exceeding supply eighteen-fold.

Corporate activity remained robust, with Damac Real Estate confirming delivery of 8,800 residential units throughout Dubai during 2026, and Taxi Dubai completing acquisition of National Taxi for AED 1.45 billion to consolidate the ride-hailing market.

Outlook:

Investors will monitor further developments in US-Iran tensions, particularly impacts on Hormuz Strait shipping and crude supply dynamics. The IMF's revised growth forecasts and central bank policy responses—including potential interest rate decisions in Egypt Thursday—warrant close attention as markets recalibrate risk assessments for the remainder of 2026.