Gulf stocks drop as poor earnings and U.S. tariffs shake investor confidence

Stocks in the Gulf dropped Sunday as investors responded to poor earnings and fresh economic pressure from the United States, according to data from Reuters.

Every major Gulf index except Egypt closed in the red. Saudi Arabia and Qatar led the declines, while Egypt was the only one to show a gain.

The sell-off was driven by a combination of disappointing quarterly numbers from top Gulf companies and a growing sense of uncertainty coming from Washington, as President Donald Trump rolled out a new collection of import tariffs.

Trump, now back in the White House, signed an executive order Thursday that slaps tariffs between 10% and 41% on goods coming from countries that missed his August 1 trade deadline. The move hit investor confidence across the region.

The timing clashed with weak job numbers from the U.S. and fed anxiety around the Federal Reserve’s next policy move. Together, they created the kind of toxic environment that leaves no room for market optimism.

Saudi Aramco, SABIC, and Jabal Omar trigger sell-offs

Saudi Arabia’s main index fell 0.8%, dragged down by a 1.2% loss in Saudi Aramco just days ahead of its earnings report due Tuesday. Aramco wasn’t alone.

Jabal Omar Development, which runs hotels and property near Mecca’s Grand Mosque, dropped 5.4% after posting a second-quarter loss. The company blamed the hit on lower hotel revenue and a 106 million riyal property impairment charge that shrank gross profits.

It didn’t stop there. Saudi Basic Industries Corp (SABIC), 70% owned by Aramco, reported its own Q2 loss and fell 1.2%. SABIC said the red ink was caused by 3.78 billion riyals in impairment and provisions tied to shutting down a cracker in the UK.

That closure was part of a broader review of its operations aimed at cutting costs and staying profitable in a tougher environment.

The biggest single hit came from Saudi Aramco Base Oil Co, which crashed 10%, its worst day since going public in December 2022. The loss came after the company reported an 18% drop in quarterly profits, leaving investors no room for second guesses.

Tariffs reshape global business, Qatar index falls, Egypt rises

Qatar’s index also fell 0.8%, led by a 1.8% decline in Qatar Islamic Bank. Traders showed no interest in holding positions with earnings falling short and no signal of relief from global conditions.

Though Qatar hasn’t taken a direct hit from Trump’s tariffs yet, the region as a whole is responding to the shift in global trade policy.

While the Gulf struggled, Egypt’s blue-chip index edged up 0.2%, thanks to a 3.2% rise in Eastern Company, the state-controlled tobacco producer. It was the only name in the region that gave investors something to hold onto as broader sentiment collapsed.

Meanwhile, oil prices, which act as a pulse for Gulf markets, dropped by $2 per barrel on Friday. Investors pulled back after rumors spread of a production increase by OPEC and allies.

Those rumors became fact Sunday when eight OPEC countries agreed to boost output in September by 548,000 barrels per day, Reuters reported during the meeting.

As the U.S. tightens trade rules, companies are already adjusting. Hydro CFO Trond Olaf Christophersen told CNBC, “We are concerned about the competitiveness of aluminum compared to other materials.”

He added that U.S. tariff costs are being passed on to customers, but the long-term issue is that “some customers in packaging are already testing steel and plastic alternatives.”

Business leaders across sectors, from chocolate and telecom to banking and energy, are ripping up their playbooks. The old “just-in-time” model is out. Now it’s about making products closer to buyers, asking for tariff exemptions, and watching for changes in how people spend money.

Tariffs are no longer side issues. They’re now a major part of how companies manage risk. And the Gulf, caught in the middle of earnings disappointments and global trade battles, is feeling the full weight of it.

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