Gulf equity markets closed lower on Tuesday, with Dubai's primary share index falling 0.6% and Saudi Arabia's benchmark index dropping 0.4%.
The sell-off marked a sharp reversal from Monday's session, when regional markets had posted gains on reports of significant progress in peace negotiations between Iran and the United States.
Investor sentiment soured as doubts mounted over whether the ongoing talks in Doha would yield a breakthrough to end tensions.
The dual headwind of waning diplomatic confidence and broader geopolitical uncertainty weighed heavily on trading activity across the region.
The volatility underscores the sensitivity of Gulf equities to developments in the U.S.-Iran relationship.
Markets that had priced in a potential de-escalation are now repricing the risk of a prolonged stalemate, highlighting the fragile nature of the current geopolitical equilibrium.