Financial News October 25, 2026: Saudi Stocks Plunge as Gulf Fighting Escalates

Saudi shares suffered their steepest decline in 18 months on Sunday as fighting with Yemen’s Houthis intensified. The selloff extended a volatile financial week dominated by $116 oil, elevated bond yields and doubts about artificial-intelligence spending, while Brazil voted in a market-sensitive presidential runoff.

Market information is current as of approximately 3 p.m. Eastern on Sunday, October 25, 2026. Gulf stock-market closes and Friday’s U.S. market results are completed. U.S., European and most Asian cash markets were closed Sunday; Brazil’s election and cryptocurrency trading remained in progress.

Financial markets entered the new week under renewed geopolitical pressure after Saudi Arabia’s benchmark stock index fell 2.7%, its worst session in 18 months. The decline followed another weekend of missile and drone attacks as the conflict between Saudi Arabia and Yemen’s Iran-aligned Houthi movement showed no sign of easing.

The Saudi selloff matters well beyond the Gulf. Brent crude finished Friday above $116 a barrel, Treasury yields remained near 5%, and global investors are already preparing for central-bank decisions and earnings from three of the largest U.S. technology companies.

Saudi Stocks Post Worst Session in 18 Months

Saudi Arabia’s Tadawul All Share Index fell as much as 3.4% before closing 2.7% lower Sunday. It was the index’s sharpest intraday decline since April 2025 and its worst completed session in 18 months. Saudi Aramco lost 0.9%.

The retreat followed additional attacks and interceptions over Saudi territory. The Saudi-led coalition said air defenses downed drones and missiles over Riyadh and southern areas. A day earlier, the Houthis said they struck Saudi oil facilities and airports, while the coalition reported intercepting two missiles.

Elsewhere, Qatar reversed early losses and closed 0.1% higher. Egypt’s EGX 30 plunged 3.6%, its largest one-day loss since June 2025. Reuters reported the completed Gulf and Egyptian market results.

Riyadh Airport Partly Reopens, but Threats Continue

Saudi authorities said King Khalid International Airport partly resumed operations Sunday, two weeks after an October 10 attack killed 13 people. Terminal 1 was designated for domestic flights and Terminal 2 for international services operated by Saudi carriers, although flight-tracking data showed little traffic.

The Houthis warned that the airport remained a target. Saudi officials also said shrapnel from intercepted ballistic missiles injured two people and damaged buildings and vehicles in the south. The coalition reported intercepting 10 ballistic missiles aimed at southern Saudi Arabia after earlier interceptions around Riyadh.

The conflict threatens energy and transport routes on both sides of the Arabian Peninsula. Fighting near Bab el-Mandeb adds another layer of risk to already disrupted trade through the Strait of Hormuz. Reuters detailed the partial airport reopening and continuing attacks.

Friday’s Completed Wall Street Results

Wall Street ended Friday lower after an unsettled week. The S&P 500 declined 0.52% to 7,623.68. The Dow Jones Industrial Average dropped 652.82 points, or 1.23%, to 52,215.16, while the Nasdaq Composite slipped 0.21% to 25,955.34.

For the week, the S&P 500 lost 0.5% and the Nasdaq fell 0.7%. The Dow gained 0.4% for its third consecutive weekly advance. Technology shares stabilized Friday after Thursday’s sharp selloff, but concerns about the cost and financing of artificial-intelligence infrastructure continued to weigh on sentiment.

Energy was the exception. The S&P 500 energy sector rose 2.5% to a record as Middle East supply fears lifted crude producers. Telecommunications shares weakened after reports that SpaceX was considering a fourth U.S. wireless carrier. Reuters reported Friday’s official Wall Street closes and sector moves.

Oil Ends at Nearly Six-Month High

Brent crude settled Friday at $116.72 a barrel, gaining $3.55, or 3.14%, for its highest close since April 29. West Texas Intermediate rose $3.80, or 3.8%, to $103.27.

Brent gained 6% for the week, while WTI added 2.3%. Houthi attacks on Saudi energy infrastructure, an oil spill off the United Arab Emirates and continuing maritime-security incidents increased concern about physical supplies. Libya also reduced production after a pipeline valve was shut.

The United States authorized an emergency release of as much as 400,000 barrels from the Strategic Petroleum Reserve to address a Louisiana refinery disruption. Germany also began selling strategic reserves. Reuters reported the completed oil settlements and supply developments.

Treasury Yields Hold Near 5% as Fed Meeting Approaches

The benchmark 10-year Treasury yield ended Friday near 4.99%. High oil prices have renewed inflation concerns, making it harder for investors to assume that central banks can quickly reverse recent rate increases.

The Federal Reserve, European Central Bank and Bank of Japan announce policy decisions in the coming week. All three tightened policy in September, and markets broadly expect them to hold rates this time. The Bank of Canada and Reserve Bank of New Zealand may increase rates as they confront energy-driven inflation.

Fed Chair Kevin Warsh’s guidance will be closely examined for clues about December. The bond market must weigh persistent inflation against weaker consumer confidence: the University of Michigan’s preliminary October sentiment index fell to 48.0.

Brazil Election Carries Market Consequences

Brazilians voted Sunday in a presidential runoff between leftist incumbent Luiz Inácio Lula da Silva and right-wing Senator Flavio Bolsonaro. Polls showed a virtually tied contest, and no result was available by the article’s cutoff time.

Bolsonaro won 47% in the first round, compared with Lula’s 45%. That surprise sent Brazilian shares and the real sharply higher on expectations for more market-oriented reforms. A Bolsonaro victory could improve the legislative prospects for that agenda because right-wing parties also performed strongly in congressional elections.

The outcome could also reshape trade relations with the United States. The Trump administration has clashed with Lula’s government over tariffs and security, while Bolsonaro has positioned himself as a closer U.S. partner. Reuters covered the election and its economic stakes.

Bitcoin Holds Near $80,000 During Weekend Trade

Bitcoin traded around $80,000 during the weekend after hovering near $80,685 Saturday. Ethereum was near $2,370. Both remained under pressure from weak institutional flows, elevated Treasury yields and a broader retreat from speculative assets.

Cryptocurrency trading provides one of the earliest continuously traded gauges of risk appetite before traditional markets reopen. The relatively contained weekend moves contrasted with the 2.7% Saudi equity decline, but another escalation in the Gulf could quickly change that balance.

AI Earnings and Central Banks Set Up a Critical Week

Approximately one-third of S&P 500 companies are scheduled to report quarterly results this week. Alphabet, Microsoft and Amazon will be the principal test of the AI investment theme after markets reacted poorly to Meta Platforms’ heavy capital spending and negative quarterly free cash flow.

Investors will focus on whether cloud and AI revenue can justify the enormous cost of data centers, chips and electricity. Eli Lilly, Caterpillar, Exxon Mobil and Chevron are also scheduled to report, connecting the earnings calendar to healthcare, industrial demand and expensive energy.

Reuters’ weekly market preview also highlights Britain’s budget, Israel’s election and a Chinese Communist Party leadership meeting as additional sources of risk.

Financial Market Outlook

Sunday’s Saudi selloff gives global investors a clear warning before Monday’s open. The main risk is no longer simply a geopolitical premium embedded in oil prices. Direct attacks on airports, energy facilities and shipping routes are affecting real economic activity and investor confidence.

• Any additional attacks on Saudi energy or transportation infrastructure.
• Brent crude’s response after Friday’s $116.72 settlement.
• Brazil’s election result and Monday trading in the real, equities and government bonds.
• Wednesday’s Federal Reserve decision and Kevin Warsh’s policy guidance.
• Alphabet, Microsoft and Amazon earnings and AI capital-spending forecasts.
• Whether the 10-year Treasury yield holds near or moves above 5%.
• Policy decisions from the ECB, Bank of Japan, Bank of Canada and Reserve Bank of New Zealand.

For markets, the coming week brings several tests at once: physical energy security, political change in major economies, the durability of the AI investment boom and central banks’ tolerance for inflation. Saudi Arabia’s Sunday decline suggests investors are entering that test with little margin for another shock.