DUBAI: Stock markets in the Middle East ended lower on Monday, with the Dubai index falling most, on fears that the United States could be heading for recession, while concerns about a widening conflict in the region added to the worries.

The US unemployment rate jumped to near a three-year high of 4.3% in July amid a significant slowdown in hiring, heightening fears the labour market was deteriorating and potentially making the economy vulnerable to a recession.

The worryingly weak July payrolls report saw markets price in a 78% chance the Federal Reserve will not only cut rates in September, but ease by a full 50 basis points. Dubai’s main share index plunged 4.5%, its biggest intraday fall since May 2022, dragged down by a 7.6% slide in blue-chip developer Emaar Properties.

The concerns that the Fed could be late in reducing its interest rates could reverberate in all financial markets, said Bas Kooijman CEO and asset manager of DHF Capital S.A.

“A recession in the US could have a broad economic impact and could affect the economies in the GCC.”

In Abu Dhabi, the index closed 3.4% lower, hit by a 7.3% decline in the country’s biggest lender First Abu Dhabi Bank.

Meanwhile, the United Arab Emirates’ non-oil private sector expanded at its slowest pace in almost three years in July, a survey showed on Monday, with both output and new order growth easing.