‘ The U.S. Federal Reserve’s decision to cut its benchmark rate by 25 basis points to 3.50%–3.75% has injected fresh optimism into global equity markets, though the tone remains cautious. U.S. indices such as the S&P 500 and Nasdaq rallied near record highs, supported by lower discount rates that favor long-duration growth sectors like technology and real estate. Globally, the MSCI World Index edged higher, while Asian markets posted gains led by tech and financials, reflecting improved risk appetite amid expectations of easier liquidity conditions. However, volatility persists as the Fed signaled a slower pace of future cuts, with only one reduction projected for 2026, tempering hopes of an aggressive easing cycle.
In the UAE, equity markets mirrored this positive sentiment. The Dubai Financial Market and Abu Dhabi Securities Exchange saw notable gains, driven by banking and real estate stocks that benefit directly from lower borrowing costs. Blue-chip names such as Emaar Properties and Emirates NBD advanced as investors priced in stronger earnings potential and improved liquidity conditions. Analysts expect this momentum to continue, supported by cheaper financing for corporates and households, which could stimulate property demand and broader economic activity. While global headwinds, such as policy uncertainty and geopolitical risks, remain, the combination of Fed easing and the UAE’s dollar peg provides a constructive backdrop for regional equities, reinforcing their appeal to both local and foreign investors.’
Hamza Dweik, Head of Trading (MENA), Saxo Bank
