Business

Stock markets in Dubai and Abu Dhabi are nearing record highs, defying broader global trade jitters fueled by escalating tariff disputes and looming deadlines. Investor optimism remains intact, despite ongoing uncertainty surrounding U.S. trade policy.

The resilience comes even as U.S. President Donald Trump announced a postponement of reciprocal tariffs to August 1, offering a brief reprieve and extending the negotiation window. The delay has temporarily calmed investor concerns and contributed to a global market rally.

On Wall Street, the S&P 500 has climbed more than 25% since its April low, recently reaching a new 2025 all-time high. Analysts are attributing the rally partly to a trend colloquially dubbed "TACO" – Trump Always Chickens Out – reflecting investor sentiment that the U.S. may continue to soften its trade stance.

“All-time highs tend to make investors nervous, but history shows they often lead to further gains,” said an eToro analyst. “A BNY study found that since 1950, the S&P 500 has posted strong 1, 3, and 5-year returns following all-time highs. Those waiting on the sidelines risk missing out.”

Still, the optimism is tempered by caution, with analysts warning that if negotiations break down or tariffs are reimposed, market volatility could return, potentially driving inflation and shaking investor confidence.

UAE Markets Lead Regional Gains

In contrast to global unease, the UAE’s financial markets have remained on a strong upward trajectory, supported by sound economic fundamentals, rising oil prices, and growing investor confidence.

The Dubai Financial Market (DFM) recently touched a 17-year high, driven by three straight weeks of gains. Key contributors included Union Properties and Emirates NBD, both delivering strong performance. Meanwhile, the Abu Dhabi Securities Exchange (ADX) is also inching closer to its record highs.

“The local market’s momentum reflects growing trust in the UAE’s economic outlook,” the eToro analyst added. “However, regional investors must stay alert to global shifts, especially trade-related developments that could indirectly affect even resilient markets like the UAE.”

The UAE is increasingly seen as a haven for global investors seeking stability, thanks to its diversified economy, government-led reforms, and strategic role in global trade.

With the August 1 tariff deadline approaching, attention is now turning to how negotiations evolve. While sentiment remains broadly positive, any disruption in global trade talks could test the durability of UAE markets in the coming weeks.

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