U.S. strikes Strait of Hormuz hours before Tuesday midterms

Gulf stock exchanges experienced a mixed performance on Tuesday as hopes of peace between Iran and Saudi Arabia were tempered by concerns over the ongoing conflict. US strikes on Iran's Qeshm Island in the Strait of Hormuz raised fears of an escalation in the eight-month war. However, the US official later clarified that the strikes appeared limited and did not signal a resumption of major combat operations.

Saudi Arabia's benchmark index slipped by 0.1%, dragged down by a 0.8% decline in Saudi Telecom Company. Nonetheless, the country's oil giant, Saudi Aramco, saw a rise of 0.2% after reporting a substantial increase in third-quarter profits, up by 34.5%. The rise in profits was mainly attributed to higher revenues and the exit from a joint venture.

The US-Iran war has impacted Aramco's output, but higher oil prices have partially offset the reduced volumes. The company also declared a base dividend of $21.9 billion. To protect its exports amid the ongoing conflict, Aramco is exploring additional export routes and overseas capacity, including a potential expansion of its East-West pipeline.

Meanwhile, Al Majed for Oud Co surged 5.2%, following a 50% jump in third-quarter profit. Adding to regional security concerns, Yemen's Houthis reportedly launched drones towards Saudi Arabia's Dammam airport, an early-warning radar in Jizan, and a military transport aircraft at Jizan airport.

In Qatar, the index rebounded from early losses, finishing 0.2% higher, with the Gulf's largest lender, Qatar National Bank, rising 0.6%. GCC equities remained largely unchanged as investors weighed regional diplomacy against renewed tensions. However, heightened risks and supply disruptions in key shipping lanes continued to pose a threat, according to Daniel Takieddine, co-founder and CEO of Sky Links Capital Group.

Dubai's main share index edged 0.1% higher, buoyed by a 2.4% gain in Emaar Properties. Emaar, a blue-chip developer, is contemplating a potential deal to acquire its construction arm, Emaar Development, worth up to $3 billion. Shares of Emaar Development surged 10.7%.

The Abu Dhabi index declined by 0.3%. Looking to safeguard its exports, the UAE's energy minister announced on Monday that the country would protect its energy infrastructure and invest in new export routes, overseas storage capacity, and shipping fleets. Outside the Gulf, Egypt's blue-chip index advanced 1.6%.