UAE equity markets closed the week on a softer note, with investor attention tilting toward US inflation data and Federal Reserve policy signals despite upbeat earnings from major domestic companies.
Both the FTSE ADX General Index and the DFM General Index registered declines, reflecting a cautious sentiment. The pullback came even as several listed firms in the Emirates posted solid half-year results, highlighting how global economic trends are increasingly influencing regional market movements.
US Inflation in Focus
Fresh data from the United States showed July inflation largely in line with forecasts. Headline CPI rose 0.2% month-on-month and 2.7% year-on-year, while core CPI—which excludes food and energy—climbed 0.3% monthly and 3.1% annually.
Analysts at ING noted signs of a cooling US labor market and lowered their growth outlook, now predicting up to two interest rate cuts by the Federal Reserve before the end of the year. Such expectations are closely monitored in the Gulf, where rate changes in the US often ripple through local markets due to currency pegs and interconnected capital flows.
Earnings Season Highlights
In Abu Dhabi, Abu Dhabi Ports reported a 17% jump in profit, but its shares fell more than 3%. Presight AI delivered nearly 19% profit growth, yet the stock slipped 1.35%. RAK Ceramics posted mild revenue gains and edged up less than 1%, while Drake & Scull International saw profits tumble, weighing on its share price.
Market watchers say the divergence between earnings performance and share price movement reflects broader caution among investors. Sectors like banking and real estate, which are sensitive to interest rate shifts, could remain volatile in the months ahead.
Global Trends Shape Local Sentiment
Analysts suggest that while corporate earnings remain an important driver for UAE markets, global monetary policy developments are playing an increasingly decisive role. A potential Fed rate cut could lower borrowing costs, lift risk appetite, and support capital flows into emerging markets.
For now, investors are treading carefully, balancing optimism over local growth with uncertainty around the global economic outlook.