Gulf Equities Edge Lower as Investors Await U.S. Inflation Data

Equity markets across the Gulf weakened on Thursday as traders adopted a cautious stance ahead of the U.S. Personal Consumption Expenditures (PCE) Price Index release, a key measure of inflation that could influence the Federal Reserve’s next interest rate decision.

Because most Gulf currencies are tied to the U.S. dollar, monetary policy shifts in Washington have a direct impact on the region’s capital flows and borrowing costs. Investors largely avoided big bets, preferring to wait for clearer signals on whether the Fed will move forward with a widely expected rate cut in September.

In Saudi Arabia, the benchmark index slipped 0.1%. Petrochemical heavyweight SABIC declined nearly 0.6%, offsetting modest gains in banking stocks. The overall tone reflected softer risk appetite, with energy-linked shares tracking the slight pullback in global crude prices.

Qatar’s market also came under pressure, losing 0.2%, dragged lower by a 1.3% drop in Doha Bank. Real estate and telecom names offered little support, leaving the index in negative territory.

The United Arab Emirates saw a similar picture. Dubai’s benchmark fell 0.3%, with blue-chip developer Emaar Properties down 0.7%. Abu Dhabi’s index eased 0.2%, weighed by weakness in energy and financial names.

Meanwhile, oil prices were steady to slightly lower, as traders weighed weaker U.S. fuel demand against ongoing geopolitical tensions and new tariff measures affecting India. Brent crude hovered below recent highs, keeping pressure on petrochemical and energy-related shares in the region.

Market sentiment was also shaped by comments from New York Fed President John Williams, who suggested the central bank is approaching a point where rate cuts are possible but stressed that upcoming data—including Thursday’s PCE release—will be decisive.

Analysts noted that Gulf investors remain focused on two major variables: the Fed’s policy path and the trajectory of global oil demand. Until clarity emerges, trading activity is likely to stay muted, with short-term moves tracking developments in global markets rather than domestic fundamentals.