Stocks in the Gulf region maintain stability as investors wait for further insights into American trade policies
In early July 2025, President Donald Trump announced a 50% tariff on Brazilian goods, effective August 1. While the impact on Gulf stock markets and individual companies has been mixed, overall, the region has shown resilience in the face of renewed trade tensions.
Gulf stock markets mostly shrugged off the U.S. tariff announcements. Despite initial losses, many indexes closed higher or stable. For instance, Dubai's main index rose to a 17-year high, and Abu Dhabi's index posted its sixth consecutive session of gains.
Country-specific movements revealed a mixed picture. Saudi Arabia's benchmark index slightly fell by 0.1%, mainly dragged down by declines in major companies like ACWA Power and oil giant Saudi Aramco. UAE markets, however, prospered, with Dubai's index up 0.7% and Abu Dhabi up 0.4%. Qatar's index was mostly flat.
Saudi Aramco saw a modest dip due to tariff uncertainty but remains engaged in strategic deals, such as LNG purchases from a U.S. facility. Construction and infrastructure firms like Drake & Scull International and Abu Dhabi Ports Company showed strength, driven by new projects and joint ventures. Companies linked to emerging sectors like crypto payments in the UAE are showing notable growth, signaling diversification beyond oil-dependent industries.
The Gulf region is somewhat insulated from direct tariff impacts, as the U.S. targets tariffs primarily on BRICS countries and other specific trading partners rather than Gulf states. However, market caution exists due to potential ripple effects on global trade and oil prices, which influence the Gulf economies deeply.
In summary, U.S. tariff threats in mid-2025 caused only modest short-term volatility in Gulf stock markets. Investors appeared to view Gulf markets as relatively stable or even opportunistic amid global trade tensions, with selective sector and company-level impacts depending on international exposure and market fundamentals.
Notable events included Saudi Aramco's talks with U.S.-based Commonwealth LNG to purchase liquefied natural gas, and the gains in industrial shares in Qatar being offset by losses in the banking sector. The Saudi index eked out a weekly gain of 0.3%, marking its third consecutive weekly increase. Trump issued new tariff notices targeting seven smaller trade partners and announced a 50% duty on U.S. copper imports, effective August 1. These latest tariff threats caused Gulf stocks to end Thursday's session largely unchanged.
As the global trade landscape continues to evolve, Gulf markets are expected to remain a focus for investors seeking opportunities amidst trade tensions.
[1] Al Jazeera, (2025). Gulf markets shrug off Trump's tariff threats. [online] Available at: https://www.aljazeera.com/news/2025/7/1/gulf-markets-shrug-off-trump-tariff-threats
[2] Reuters, (2025). Gulf stocks mixed as U.S. tariff news weighs on sentiment. [online] Available at: https://www.reuters.com/business/gulf-stocks-mixed-us-tariff-news-weighs-sentiment-2025-07-01/
[3] Bloomberg, (2025). Gulf markets insulated, but cautious over U.S. tariffs. [online] Available at: https://www.bloomberg.com/news/articles/2025-07-01/gulf-markets-insulated-but-cautious-over-u-s-tariffs
- The mixed impact on Gulf stock markets due to U.S. tariff announcements has led to a diverse valuation of various indexes, with some reaching 17-year highs, as seen in Dubai's main index.
- While individual companies like ACWA Power and Saudi Aramco have experienced losses, other sectors such as construction and infrastructure have shown strength, driven by new projects and joint ventures.
- Companies in emerging sectors, like those involved in crypto payments in the UAE, are exhibiting significant growth, signaling a shift away from oil-dependent industries.
- The Gulf region exhibits some protection from direct tariff impacts, but market caution persists due to potential knock-on effects on global trade, oil prices, and consequently, Gulf economies.
- Investors are expected to view Gulf markets as relatively stable or even opportunistic amidst global trade tensions, as the region remains a focal point for those seeking investment opportunities within the industry of finance and technology.
