DUBAI/MANAMA – Stock markets across the Gulf region fell in early Wednesday trading as renewed fears over a global trade war rattled investor confidence. The downturn follows escalating trade tensions between the United States and China, with U.S. President Donald Trump announcing fresh tariff investigations and China responding with aggressive countermeasures.
The heightened trade friction has intensified concerns of a potential global recession, sending shockwaves through energy markets and export-reliant economies across the region.
In Saudi Arabia, the benchmark Tadawul All Share Index (TASI) dropped 0.4%, weighed down by a 0.6% decline in Saudi Aramco and a 1.3% slide in Riyad Bank. The weakness comes amid subdued oil prices, which continue to act as a barometer for market sentiment in the region.
Adding to investor jitters, United Carton Industries Company announced plans to float a 30% stake on the Saudi Exchange, marking the first initial public offering (IPO) since regional equities began sliding due to tariff-related pressures.
UAE Markets Retreat
In Dubai, the main share index fell 0.7%, as heavyweights Emirates NBD and Emaar Properties posted losses of 2.3% and 1.3%, respectively. The broader sell-off mirrored unease over the potential impact of U.S. policy moves on regional investment flows and global growth.
Abu Dhabi’s index also dipped 0.4%, reflecting broader Gulf-wide unease over policy volatility and its possible repercussions on corporate earnings and capital market stability.
Oil prices, a critical driver of economic activity and stock performance across the Gulf, edged lower as traders weighed the fallout of the U.S.-China tariff standoff on energy demand.
“Markets are reacting to the fear that these trade disputes will dampen global growth, which in turn hits oil prices and investor sentiment in oil-producing nations,” said a Dubai-based investment strategist who asked not to be named.
Wider Regional Impact
The Qatar Exchange (QSI) eased 0.2%, driven by a 0.6% decline in Qatar Islamic Bank. While Doha’s market has shown some resilience in recent weeks, it has not been immune to broader risk-off moves.
The retreat across Gulf equities reflects a wider risk aversion trend as investors seek to reposition portfolios in response to policy uncertainty. Trump's directive on Tuesday to initiate new tariff probes into critical minerals, on top of ongoing reviews of pharmaceuticals and semiconductors, has deepened investor unease.
Additionally, reports that China has ordered airlines to suspend deliveries of Boeing aircraft highlight the real-world implications of the deepening geopolitical and economic standoff.
Outlook: Volatility Ahead
With trade disputes now touching multiple sectors—from industrial goods to technology and energy—the Gulf’s export-driven and investment-heavy economies are bracing for potential fallout.
Market analysts warn that unless clarity emerges around tariff enforcement and trade diplomacy, regional equities may continue facing pressure, particularly in sectors with high international exposure or reliance on external demand.
