Mideast Stocks: Most Gulf Markets in Red As Trump’s Fed Battle Heats Up

Most stock markets in the Gulf ended lower on Tuesday in line with global peers following U.S. President Donald Trump's removal of Federal Reserve Governor Lisa Cook, a decision that erodes trust in U.S. assets and the independence of the central bank.

Trump took the unprecedented action on Monday of firing Cook, the first African-American woman to serve as a Fed governor, over claims of mortgage borrowing impropriety. Saudi Arabia's benchmark index eased 0.2%, with Al Rajhi Bank losing 0.8%.

Oil prices - a catalyst for the Gulf's financial markets - edged down on Tuesday after surging nearly 2% in the previous session, with traders keeping a close eye on developments surrounding the Ukraine war that could disrupt Russian fuel supplies.

The decline was primarily driven by falling oil prices. Furthermore, a general downturn in global equities weighed on market sentiment, said Milad Azar, Market analyst at XTB MENA.

"Looking ahead, the market is expected to maintain a cautious stance this week in anticipation of the U.S. Personal Consumption Expenditures inflation data due on Friday."

Dubai's main share index dropped 0.5%, hit by a 1.7% fall in blue-chip developer Emaar Properties and a 2% decline in top lender Emirates NBD. World stock markets edged off this month's record highs, with focus on the U.S. after Trump's removal of Cook clouded Fed policy and rate cut expectations.

On Friday, Fed Chair Jerome Powell signalled a possible rate cut at the Fed's meeting next month, saying that risks to the job market were rising but inflation remained a threat, and that a decision wasn't set in stone.

The Fed's stance holds significant implications for Gulf economies, where most currencies are pegged to the U.S. dollar, making it an anchor for regional monetary stability. In Abu Dhabi, the index closed 0.4% lower.

The Qatari index advanced 1%, following two sessions of declines, with the Gulf's biggest lender Qatar National Bank jumping 3.5%.

Outside the Gulf, Egypt's blue-chip index declined 1.4%, dragged down by a 2% slide in Commercial International Bank.

SAUDI ARABIA fell 0.2% to 10,875

Abu Dhabi lost 0.4% to 10,167

Dubai dropped 0.5% to 6,103

QATAR gained 1% to 11,406

EGYPT declined 1.3% to 35,358

BAHRAIN was down 0.3% to 1,930

OMAN added 0.1% to 5,014

KUWAIT slipped 0.7% to 9,179