Wadi Shueib catchment in Jordan is a water stress area and climate change is creating a further deficiency in precipitation, streamflow, and soil moisture; which are a deterrent to agriculture production in the area. In order to analyze the drought-like situation in the area, a hybrid drought index (HDI) has been developed considering the combined effect of these three variables. Fuzzy analytical hierarchy process (F-AHP) and entropy weight methods were carried out to develop a hybrid drought index (HDI) which combines meteorological, hydrological, and agricultural drought indices based on precipitation, streamflow, and soil moisture data in the area. The wavelet transform (WT) with cross wavelet (XCT) and wavelet coherence (WTC) were applied to investigate the interaction and the relations between the HDI index, drought indices, and large-scale sunspot activity Niño3.4 index. The results show that HDI can easily capture the trend of the drought-like conditions in the area based on the available data. The trend analysis of HDI revealed an increasing trend in the drought incidences in the near future. The study can be used as an early alarm for drought in the area, which can be helpful in the decision-making process towards water resources planning and management in the future.