Major stock markets in the Gulf showed caution in early trading on Wednesday, as investors remained uncertain about the future of U.S. import tariffs and the Federal Reserve’s approach to rate cuts. U.S. President Donald Trump’s trade advisers were finalizing plans to impose reciprocal tariffs on countries that impose duties on U.S. imports, increasing fears of a global trade war.
In Saudi Arabia, the benchmark index (.TASI) dropped 0.3%, largely due to a 1.6% decline in petrochemical producer Saudi Basic Industries Corp. (SABIC). Saudi Aramco also saw a 0.3% loss. Oil prices, a key driver for Gulf markets, edged lower as U.S. crude stockpiles increased and tariff concerns dampened sentiment, although stronger refining margins helped to limit losses.
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In Dubai, the main share index (.DFMGI) decreased by 0.5%, impacted by a 3.8% fall in Dubai Islamic Bank (DISB.DU), despite the bank reporting an increase in annual profit. However, in Abu Dhabi, the index (.FTFADGI) edged up by 0.1%, buoyed by a 0.5% increase in Aldar Properties (ALDAR.AD), which reported a 37% year-on-year rise in fourth-quarter profit.
Qatar’s market (.QSI) declined by 0.3%, with telecom firm Ooredoo (ORDS.QA) falling by 1.9%. Investor attention is now focused on the upcoming U.S. Consumer Price Index (CPI) report, due at 1330 GMT.
Investor expectations for Fed rate cuts this year have been scaled back, with many now anticipating the central bank will hold rates steady in March and May. Federal Reserve Chair Jerome Powell stated on Tuesday that the economy is in a strong position, and while the Fed isn’t in a hurry to cut rates, it remains ready to do so if inflation drops or the job market weakens.
