Most Gulf stock markets closed lower on Tuesday as investors awaited news from Iran-U.S. peace talks and the U.S. Federal Reserve's policy decision, although corporate earnings helped limit losses.
U.S. President Donald Trump on Tuesday repeated threats to target bridges and other civilian infrastructure if Iran fails to reach a deal, while saying in a Fox News interview that talks had been positive.
Saudi Arabia's benchmark index (.TASI) dropped 0.9%, its biggest one-day decline in about a month, weighed down by a 0.7% fall in Al Rajhi Bank (1120.SE) and a 1% decline in oil major Saudi Aramco (2222.SE).
However, Zain Saudi Arabia (7030.SE) added 0.5%, after reporting a more than 60% rise in second-quarter profit.
While signs of a U.S.-Iran de-escalation have supported Gulf markets, concerns over Red Sea disruptions, weaker oil prices and stress in global AI stocks could continue to weigh on regional equities, said Joseph Dahrieh, managing director at Tickmill.
Yemen's Iran-aligned Houthi movement said on Monday it had targeted several crude oil supply and transportation facilities connecting eastern Saudi Arabia to Yanbu, a key Red Sea oil export hub.
Dubai's main share index (.DFMGI) retreated 0.9%, as top lender Emirates NBD (ENBD.DU) fell 2.5%, ending a three-session winning streak.
In Abu Dhabi, the benchmark index (.FTFADGI) eased 0.1%, with Alpha Dhabi Holding (ALPHADHABI.AD) down 0.7%.
Fertiglobe (FERTIGLB.AD) rose 0.4% after the fertiliser company reported a steep rise in quarterly profit.
Earnings provided some support, but investors remained focused on the Fed's decision. With most Gulf currencies pegged to the dollar, the region is highly sensitive to U.S. interest rate moves. CME FedWatch showed a 62% probability the Fed would leave rates unchanged, with markets pricing an 81% chance of a hike in September.
The Qatari index (.QSI) fell 0.6%, with petrochemical maker Industries Qatar (IQCD.QA) losing 1.8%.
Outside the Gulf, Egypt's blue-chip index (.EGX30) rose 0.2%, helped by a 0.9% gain in Commercial International Bank (COMI.CA).
