Most Middle East stock markets rebounded in early trade on Monday 26 October 2026, as talks in Tehran raised hopes that tensions between the United States and Iran might ease. The meeting brought together officials from Saudi Arabia, Turkey and Pakistan with Iranian leaders, in what Reuters described as the first high-level contact between the four countries since Saudi Arabia became a pressure point in the wider Iran conflict.

First high-level contact since Saudi became a pressure point

Saudi Arabia was represented by Defence Minister Prince Khalid bin Salman, Pakistan by army chief Field Marshal Asim Munir, and Turkey by intelligence chief Ibrahim Kalin. They were due to meet Iran's Supreme National Security Council, with Iranian officials presenting the visit as a push for dialogue. Saudi Arabia's foreign ministry said the aim was to de-escalate and to open negotiating channels to prevent a return to military escalation.

Markets rebound, but attacks continue

The market response was immediate in the Gulf. Saudi Arabia's benchmark index jumped 2.5%, heading for its first gain in six sessions, led by Saudi Aramco, up 1.3%, and Al Rajhi Bank, up nearly 3%. Qatar's benchmark climbed 1.8%, with every constituent in positive territory, while Abu Dhabi added 0.4% and Egypt's blue-chip index rose 0.6% after a 3.6% fall in the previous session. Dubai was flat after falling 1.4%.

Why this meeting matters

The rebound did not mean the risks had gone. Houthi attacks on Saudi Arabia continued, including claims of attacks on Riyadh airport and oil facilities, and earlier mediation efforts in June produced an interim agreement that quickly unravelled. The three visiting countries signed the Mecca Joint Defence Agreement in August, under which an attack on one member is treated as an attack on all.