October 15, 2025
Major Gulf stock markets ended higher, boosted by optimism over potential U.S. Federal Reserve rate cuts, although ongoing global trade tensions continue to weigh on investor sentiment.
Gulf stock markets advanced on Wednesday, buoyed by hopes of U.S. Federal Reserve interest rate cuts, which investors expect could stimulate global liquidity and support equities. Despite these gains, lingering trade tensions and geopolitical concerns kept some investor sentiment cautious.
The Dubai Financial Market (DFM) gained 0.8%, while the Abu Dhabi Securities Exchange (ADX) rose 1.1%. Saudi Arabia’s Tadawul All Share Index (TASI) increased 0.9%, led by gains in banking and petrochemical sectors. Qatar, Bahrain, and Kuwait also posted modest gains.
“Investors are reacting to potential U.S. policy easing, which could help stabilize global capital flows,” said Rashid Al Marri, senior analyst at Gulf Investment Corporation. “However, trade tensions between the U.S. and major partners remain a headwind.”
U.S. Rate Cut Hopes: Market participants anticipate that the Federal Reserve may reduce interest rates to support growth amid slowing economic indicators. Lower rates typically encourage investment in equities and emerging markets, benefiting Gulf markets that are highly exposed to foreign capital flows.
Oil Prices: Crude oil prices stabilized near $95 per barrel after a volatile session, supporting energy-sector stocks across the Gulf. Saudi Aramco and ADNOC shares contributed to overall index gains.
Banking and Financial Sector: Gulf banks benefited from expectations of lower borrowing costs and improved liquidity. Several regional banks saw their shares rise by 1–2% on Wednesday.
Despite optimism on U.S. monetary policy, investors remain wary of global trade friction, particularly ongoing negotiations between major economies and lingering Middle East tensions. Analysts caution that geopolitical uncertainty can cause sudden market volatility.
“While liquidity injections from the Fed could buoy markets, investors are mindful that trade and regional risks could trigger sharp corrections,” noted Fatima Al Shehhi, portfolio manager at Emirates Capital.
Energy: Supported by stable oil prices and production discipline among OPEC+ members.
Financials: Banks and financial institutions gained amid positive rate expectations.
Real Estate & Construction: Mixed performance, with Abu Dhabi real estate stocks outperforming Dubai’s due to specific corporate announcements.
Technology & Industrials: Limited movement, with investors waiting for U.S. and China policy signals.
Gulf markets are expected to remain sensitive to U.S. monetary policy announcements, oil price movements, and geopolitical developments. Analysts advise investors to monitor global trade discussions and regional stability, as these factors could influence capital flows and stock valuations in the coming weeks.
“The short-term outlook is cautiously positive, but risk management remains key,” said Al Marri. “Gulf markets are likely to follow global cues closely.”
