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Gulf Markets See Mixed Gains as Investors Await US Inflation Data

An investor watches a screen displaying stock information on the Saudi Stock Market (Tadawul) in Riyadh. (Reuters)
An investor watches a screen displaying stock information on the Saudi Stock Market (Tadawul) in Riyadh. (Reuters)
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Gulf Markets See Mixed Gains as Investors Await US Inflation Data

An investor watches a screen displaying stock information on the Saudi Stock Market (Tadawul) in Riyadh. (Reuters)
An investor watches a screen displaying stock information on the Saudi Stock Market (Tadawul) in Riyadh. (Reuters)

As the world anticipates crucial economic data - specifically US consumer prices - most Gulf markets posted mixed gains at the start of this week. This performance reflects the influence of global stocks after a challenging period for investors, driven by fears of a US recession.

Most Gulf stock markets closed at the beginning of the week with increases ranging between 2 and 0.2 percent, supported by positive economic data last week, and the statement of some policymakers in the US Federal Reserve that they may reduce interest rates next September, according to Reuters.

In a statement to Asharq Al-Awsat, the Head of Asset Management at Arbah Capital, Mohammed Al-Farraj, explained that the recovery of Gulf markets is driven by several factors. Chief among them are expectations of improved global economic performance, supported by central banks in many countries easing monetary policies.

Additionally, the region is benefitting from rising oil prices, increased foreign investment inflows, and improved financial conditions for companies, he remarked.

Al-Farraj stressed that the performance of Gulf markets in the coming period will be affected by US inflation data, which will be a decisive factor in determining the course of interest rates.

For his part, Chief Economist at Riyad Bank, Dr. Nayef Al-Ghaith, told Asharq Al-Awsat that expectations of the Federal Reserve’s decisions in September and the rest of 2024 depend largely on the economic data, such as inflation rates, unemployment, and GDP growth.

“Central banks in the Gulf countries often follow the movement of the Federal Reserve due to the peg of their currencies to the dollar. Therefore, any change in US interest rates could be reflected in borrowing costs and deposits in Gulf banks,” he remarked.

According to Reuters, three Federal Reserve policymakers expressed confidence on Thursday that inflation had decreased sufficiently to warrant a reduction in interest rate. This news, combined with a larger-than-expected drop in US unemployment claims, contributed to a market recovery.

The US Department of Labor reported a 17,000 decrease in initial claims for government unemployment benefits, bringing the total to 233,000 seasonally adjusted claims for the week ending Aug. 3. This decline marks the largest drop in about 11 months.

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China Hits Back at US and Will Raise Tariffs on American Goods from 84% to 125%

An electronic board shows Shanghai and Shenzhen stock indices as people walk on a pedestrian bridge at the Lujiazui financial district in Shanghai, China April 11, 2025. REUTERS/Go Nakamura
An electronic board shows Shanghai and Shenzhen stock indices as people walk on a pedestrian bridge at the Lujiazui financial district in Shanghai, China April 11, 2025. REUTERS/Go Nakamura
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China Hits Back at US and Will Raise Tariffs on American Goods from 84% to 125%

An electronic board shows Shanghai and Shenzhen stock indices as people walk on a pedestrian bridge at the Lujiazui financial district in Shanghai, China April 11, 2025. REUTERS/Go Nakamura
An electronic board shows Shanghai and Shenzhen stock indices as people walk on a pedestrian bridge at the Lujiazui financial district in Shanghai, China April 11, 2025. REUTERS/Go Nakamura

China announced Friday that it will raise tariffs on US goods from 84% to 125% — the latest salvo in an escalating trade war between the world's two largest economies that has rattled markets and raised fears of a global slowdown.

While US President Donald Trump paused import taxes this week for other countries, he raised tariffs on China and they now total 145%. China has denounced the policy as “economic bullying" and promised countermeasures. The new tariffs begin Saturday.

Washington's repeated raising of tariffs “will become a joke in the history of the world economy,” a Chinese Finance Ministry spokesman said in a statement announcing the new tariffs. “However, if the US insists on continuing to substantially infringe on China’s interests, China will resolutely counter and fight to the end.”

China’s Commerce Ministry said it would file another lawsuit with the World Trade Organization against the US tariffs.

“There are no winners in a tariff war,” Chinese leader Xi Jinping said during a meeting with the Spanish Prime Minister Pedro Sanchez, according to a readout from state broadcaster CCTV. “For more than 70 years, China has always relied on itself ... and hard work for development, never relying on favors from anyone, and not fearing any unreasonable suppression.”

Chinese Foreign Minister Wang Yi on Friday said China stands firm against Trump’s tariffs not only to defend its own rights and interests but also to “safeguard the common interests of the international community to ensure that humanity is not dragged back into a jungle world where might makes right.”

Wang made the remarks when he met Rafael Mariano Grossi, director general of the International Atomic Energy Agency in Beijing. Wang said China will “work together with other countries to jointly resist all retrogressive actions in the world.”

Trump's on-again, off-again measures have caused alarm in stock and bond markets and led some to warn that the US could be headed for a recession. There was some relief when Trump paused the tariffs for most countries — but concerns remain since the US and China are the world's No. 1 and No. 2 economies, respectively.

“The risk that this escalating trade war tips the world into a recession is rising as the two largest and most powerful countries in the world continue to punch back with higher and higher tariffs,” Jennifer Lee, a senior economist at BMO Capital markets, wrote Friday. “No one truly knows when this will end.”

Chinese tariffs will affect goods like soybeans, aircrafts and their parts and drugs — all among the country's major imports from the US Beijing, meanwhile, suspended sorghum, poultry and bonemeal imports from some American companies last week, and put more export controls on rare earth minerals, critical for various technologies.

The United States' top imports from China, meanwhile, include electronics, like computers and cell phones, industrial equipment and toys — and consumers and businesses are likely to see prices rise on those products, with tariffs now at 145%.

Trump announced on Wednesday that China would face 125% tariffs, but he did not include a 20% tariff on China tied to its role in fentanyl production.

White House officials hope the import taxes will create more manufacturing jobs by bringing production back to the United States — a politically risky trade-off that could take years to materialize, if at all.