Gulf countries are significant investors in U.S. stocks, bonds, and other asset classes.
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Investors should focus closely on reports that the Gulf countries are considering canceling investment contracts and selling existing investments. As a percent of capital market or direct investments, Gulf countries represent a small percent of the total foreign investment into the U.S. However, when one considers that these six countries with a combined population of about 60 million people, about the size of California and Texas, account for an estimated 4–5% of all foreign capital invested in the U.S. on a per-capita basis, this is certainly a significant concentration of outward investment.
Japan, Cayman Islands, Japan, and Canada invest significantly more in the U.S. than do the Gulf countries.
Data from the Bureau of Economic Analysis
Gulf Sovereign Wealth Investments In The U.S.
Investments in the U.S. represent over 35% of total Gulf Assets Under Management
Data from fund documents
The six Gulf countries’ eleven sovereign wealth funds invest about $2 trillion in the U.S, which is over 35% of their total assets under management. Thse countries invest in U.S. stocks, bonds, alternative investments such as hedge funds, real estate, and infrastructure. Over 25% of the total Gulf investments in the U.S. are in equities and about 17% are in fixed income products, especially U.S. Treasuries.
Gulf sovereign wealth funds invest in all U.S. asset classes.
Data from sovereign wealth documents.
Gulf investments in U.S. equities are about 1% of the entire $65 trillion market. (It is possible that the Gulf level of equity investments is higher given that a sizable number of investments are in custody in the U.K. so getting an exact figure is challenging.) If Gulf sovereign wealth fund managers decided to sell U.S. stocks collectively, this action might move markets downward temporarily more due to current investor nervousness.
The Gulf investments of about $420bn in U.S. private equity is proportionally far more significant than investments in the stock market. Gulf investments represent about 8–10% of the entire U.S. private equity market. This is genuinely outsized influence, particularly given how concentrated those investments are in specific sectors such as infrastructure, technology, and real estate.
The bond market is potentially a far more dangerous pressure point than the equity market. Gulf states collectively hold about $307 bn in U.S. Treasuries and bonds. If equity and bond selling happened simultaneously, or even a quiet decision to stop rolling over maturing Treasuries, that could hit the bond market and push up yields. Higher yields would mean higher borrowing costs for the U.S. treasury, corporations, and individuals. In turn, eventually those higher borrowing costs could push the equity market down. One need only remember when in 2023 Japan quietly reduced investments in Treasuries; this led to noticeable spikes in yields.
Specific sectors in alternative investments are more vulnerable than selling U.S. stocks. Gulf countries invest about $186 billion in alternative investments; they are highly concentrated in AI infrastructure, technology, and real estate. The concern would be if Gulf countries started reducing their investments in these types of alternative investments, they could hurt startup valuations, reduce capital in AI and clean energy, and damage several major real estate markets, especially in Miami and New York. It is important to remember that alternative investments are not easy to sell; reducing those investments could take Gulf investors many years. However, a decision not to make any new investment commitments could really spook the economy at large.
Potential Gulf Investments In The U.S.
According to the White House in May 2025, Gulf countries pledged over $3 trillion in total investments to the U.S. Reportedly, the commitments were from Saudi Arabia ($600 billion–$1 trillion), the UAE
U.S. Investments In The Gulf Countries
Gulf countries invest about 15 times more in the U.S. than does the U.S. in Gulf countries.
Data is from sovereign wealth fund documents.
Given the depth and diversity of U.S. capital markets, as well as direct investment opportunities Gulf countries invest 12-15 times more in the United States than the U.S. invests in their countries. A well-known investor in the Gulf, particularly the UAE, is the Trump family.
Comparatively, the U.S. invests significantly less in Gulf countries.
Data from BEA, EY, UNCTAD
The Gulf’s Power Is In Threatening Not To Buy Assets Not In Selling Them
Given how nervous investors are about the current chaos in Iran and other Middle Eastern countries presently, it is no surprise that even a hint of foreign investors pulling out from the U.S would make market participants even more jittery. Even if Gulf countries started selling their investments in U.S. stocks and bonds, it is unlikely they would do so all at once. Where Gulf countries have more influence is in threatening not to buy anymore U.S. stocks and bonds and in canceling the $3 trillion investment commitments they promised last year. If Gulf sovereign wealth funds were to undertake such actions, they would be signaling to the world that they are prepared to use their investment muscle to push the U.S. and Israel to end the Iranian conflict.
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