As the world’s financial markets brace for a pivotal decision from the U.S. Federal Reserve, global investors are turning their attention to the United Arab Emirates. With markets having fully priced in a 25 basis point rate cut, the first since 2024, the question is whether the Fed’s action will be too little, too late, especially as cracks appear in the U.S. labor market. Against this backdrop of heightened global volatility, gold has surged to $3,700, while UAE equities have emerged as a clear source of strength and a stable option for investors.
According to Josh Gilbert, a Market Analyst at eToro in Dubai, the resilience of UAE stocks has been “remarkable” this year. Unlike global indices, which have been rattled by concerns over new tariffs, both the Dubai Financial Market (DFM) and the Abu Dhabi Securities Exchange (ADX) have demonstrated significant strength. The DFM, in particular, has outperformed most major global indices in 2025, with its main index rising by 19.39% in the first seven months alone and its market capitalization topping AED 1.06 trillion by the end of July.
The robustness of the UAE’s financial system is not accidental; it is engineered. The country’s sovereign wealth and public pension assets now exceed $2.4 trillion, the third-largest globally, providing a massive capital buffer that reinforces investor confidence. This stability, combined with strategic economic diversification, has made the UAE a major option for international investment.
In 2025, the UAE will continue to attract record levels of foreign direct investment (FDI), driven by business-friendly regulations, a competitive tax system, and political stability. Investments are flowing into a diverse range of sectors, with non-oil sectors contributing to 75.5% of the national GDP. Real estate has been a core magnet for FDI, with Dubai’s prime residential market forecast to grow by 8 to 12 percent in 2025, outperforming most other global luxury hubs. The DFM also saw a 298% increase in net profit before tax in the first half of 2025, underpinned by growing market depth and investor engagement.
The sustained performance of the UAE market is further supported by strong corporate fundamentals and high investor participation. Foreign investors contributed 53% of total trading value in the first half of the year, with 84% of new investors coming from outside the UAE. The average daily trading value on the DFM rose by 75% year-on-year in the first half of 2025, while the ADX saw foreign net investment nearly double to AED 13.6 billion. This influx of foreign capital signals strong international confidence in the UAE’s economic outlook and its position as a global financial hub.
