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UAE Retail Investors Eye Interest Rate Decisions as Key Market Driver, eToro Reports
(MENAFN- Golin MENA) Dubai, UAE – January 29, 2025: As the Federal Reserve prepares to announce its latest interest rate decision today, UAE retail investors are closely assessing how this will affect their portfolios. Recent data from eToro reveals that 57% of UAE retail investors factor interest rate changes into their investment strategies, underscoring the significant influence of monetary policy on market sentiment.
While interest rates are a critical consideration, earnings season also plays a pivotal role. According to eToro, 46% of UAE retail investors adjust their portfolios based on quarterly earnings reports, while 33% take earnings into account but do not prioritize them. This demonstrates the balancing act between central bank policy and corporate performance, which both serve as key drivers of market movement.
Market analysts expect the Federal Reserve to keep rates within the current 4.25%-4.50% range. However, investors will be closely watching Federal Reserve Chairman Jerome Powell’s comments for indications on the future trajectory of interest rates. Current projections suggest two 25-basis-point rate cuts in 2025, with the first anticipated in June, though political factors—such as calls from former President Donald Trump for more aggressive rate cuts—introduce uncertainty.
In addition to interest rates, attention is turning to earnings from high-growth tech companies like Tesla, Meta, and Microsoft, all of which are set to report today. The ongoing interplay between monetary policy and corporate earnings is expected to be a dominant theme in the markets in the coming months.
"Investors are in a tug-of-war between the impacts of interest rate decisions and corporate earnings, both of which play significant roles in shaping market direction," said George Naddaf, MENA Managing Director at eToro.
While interest rates are a critical consideration, earnings season also plays a pivotal role. According to eToro, 46% of UAE retail investors adjust their portfolios based on quarterly earnings reports, while 33% take earnings into account but do not prioritize them. This demonstrates the balancing act between central bank policy and corporate performance, which both serve as key drivers of market movement.
Market analysts expect the Federal Reserve to keep rates within the current 4.25%-4.50% range. However, investors will be closely watching Federal Reserve Chairman Jerome Powell’s comments for indications on the future trajectory of interest rates. Current projections suggest two 25-basis-point rate cuts in 2025, with the first anticipated in June, though political factors—such as calls from former President Donald Trump for more aggressive rate cuts—introduce uncertainty.
In addition to interest rates, attention is turning to earnings from high-growth tech companies like Tesla, Meta, and Microsoft, all of which are set to report today. The ongoing interplay between monetary policy and corporate earnings is expected to be a dominant theme in the markets in the coming months.
"Investors are in a tug-of-war between the impacts of interest rate decisions and corporate earnings, both of which play significant roles in shaping market direction," said George Naddaf, MENA Managing Director at eToro.
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