Gulf stocks subdued as Trump steps up tariff threats

Gulf equities ended largely subdued on Monday, pressured by renewed tensions in the U.S. tariff war, though some investors hoped President Donald Trump's threats were largely rhetorical.

Trump said on Saturday he would impose a 30% tariff on most EU and Mexican imports starting August 1, despite ongoing talks.

The European Union extended a suspension of countermeasures to U.S. tariffs until early August while seeking a negotiated settlement, but Germany's finance minister Lars Klingbeil urged firm action if the levies go ahead.

Saudi Arabia's TASI index dropped 0.4%, extending previous session's losses, with Saudi Arabian Mining Company 1211 retreating 1.1%.

ACWA Power Co 2082 gained 0.6% after signing $8.3 billion in clean energy deals, helping limit the decline.

Most sectors were in negative territory, said Joseph Dahrieh, managing principal at Tickmill.

"Nevertheless, the Saudi market retains the potential for recovery, contingent on further positive second-quarter results and a sustained rally in oil prices."

Dubai's main index DFMGI closed flat but touched a fresh 17-year high, as mixed sector performance and caution ahead of earnings kept trade subdued.

Abu Dhabi index FADGI also ended the session unchanged.

Investors now await U.S. inflation data for June, due on Tuesday, for insights on the Federal Reserve's interest rate path. Markets are currently pricing in just over 50 basis points worth of easing by December.

The Fed's decisions have a significant impact on the Gulf region's monetary policy, as most regional currencies are pegged to the U.S. dollar.

The Qatari index GNRI slipped 0.6%, with stocks falling across board. Qatar Islamic Bank QIBK led the decline, losing 1.3%, its sharpest fall in nearly a month.

Outside the Gulf, Egypt's blue-chip index EGX30 climbed 2%, with Commercial International Bank COMI jumping 3.4%.