UAE Stock Markets End Lower as Investors Await Key U.S. Inflation Data. August 29, 2025 – Stock markets across the United Arab Emirates closed in the red on Friday, as traders adopted a cautious stance ahead of critical U.S. inflation figures. The upcoming release of the Personal Consumption Expenditures (PCE) Price Index, the U.S. Federal Reserve’s preferred inflation gauge, is expected to shape future interest rate decisions.
The outcome of this data is highly significant for Gulf economies, given that most regional currencies remain pegged to the U.S. dollar. Any indication of prolonged tight monetary policy by the Fed could increase pressure on liquidity, investment flows, and overall market sentiment across the Middle East.
Dubai Market Retreats After Early Gains
Dubai’s benchmark index (.DFMGI) slipped 0.3%, reversing earlier advances as banking and utility stocks pulled the market lower.
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Dubai Islamic Bank (DISB.DU), the country’s largest Sharia-compliant lender, fell 1.3%.
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Emirates Central Cooling Systems Corporation (Empower) (EMPOWER.DU) recorded a steep 2.9% decline, weighing heavily on the utility sector.
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Tecom Group (TECOM.DU) also came under pressure, sliding 1.8% after announcing that its board had approved an AED 1.6 billion ($435.7 million) investment to acquire 138 land plots.
Market analysts warned that Dubai’s index is trading dangerously close to a key support level. A breach could trigger a more pronounced correction, particularly after several weeks of volatile trading that followed earlier strong gains.
“Dubai’s market has been struggling to hold on to its recent strength. If the support levels are broken, we may see a sharper downside in the short term,” noted Milad Azar, market analyst at XTB MENA.
Abu Dhabi Index Posts Fifth Consecutive Weekly Loss
Meanwhile, Abu Dhabi’s main index (.FTFADGI) ended the session 0.2% lower, extending its downward trend for the fifth week in a row.
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Aldar Properties (ALDAR.AD), the emirate’s leading developer, declined 1%.
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Adnoc Gas (ADNOCGAS.AD) slipped 0.9%, adding to the negative momentum.
In contrast, Adnoc Logistics & Services (ADNOCLS.AD) edged up 0.2% after its parent company, Abu Dhabi National Oil Company (ADNOC), announced the successful sale of a 3% stake in the subsidiary through a $317 million bookbuild offering.
Despite this positive development, Abu Dhabi’s index closed the week down 1.1%, marking its fifth straight weekly decline. Dubai’s market also recorded a weekly fall of 1%, its third consecutive week in negative territory, according to LSEG data.
Oil Prices Add to Pressure
Regional stock market sentiment was further dented by weakness in crude oil prices, a critical driver of Gulf financial markets.
Brent crude slipped 0.7% to $68.21 per barrel by 11:33 GMT, weighed down by concerns over Russian supply disruptions and fears of reduced demand as the U.S. summer driving season comes to an end.
The decline in energy prices has amplified investor caution, given the heavy reliance of Gulf economies on oil revenues.
Outlook
With both Dubai and Abu Dhabi markets closing lower, investor attention now firmly shifts to the release of the U.S. PCE Price Index. Stronger-than-expected inflation data could force the Federal Reserve to maintain higher interest rates for longer, which may tighten liquidity in emerging markets like the UAE.
Until greater clarity emerges on U.S. monetary policy, regional markets are expected to trade cautiously, with banking, real estate, and energy shares remaining under close watch.
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