Stock markets in the Gulf were subdued in early trading on Wednesday amid uncertainty over interest rate cuts by the Federal Reserve this year, following an unexpected improvement in U.S. consumer confidence.

The core personal consumption expenditures price index, the Fed's preferred measure of inflation, is due on Friday, and will be closely watched for clues on the U.S. central bank's policy path.

Most Gulf currencies are pegged to the dollar, and any U.S. monetary policy change is usually followed by Saudi Arabia, the United Arab Emirates and Qatar.

The Qatari benchmark index slid 0.8%, pressured by a 1.7% drop in Qatar Islamic Bank and a 3.1% loss in United Development.

Dubai's benchmark stock index fell 0.4%, weighed down by losses in most sectors. Emaar Properties slipped 1.8% and Emirates Central Cooling dropped 2%.

However, beleaguered contractor Drake & Scull International surged 21.6% to 0.303 dirham against a reference price of 0.25 dirham. The stock resumed trading on Wednesday, following a suspension for restructuring of more than five years and losses dating back to 2015.

The Abu Dhabi benchmark index edged 0.1% lower with Alpha Dhabi Holding declining 3.5% and Aldar Properties, the emirate's biggest developer, sliding 1.3%.

Saudi Arabia's benchmark stock index was down 0.3%, with most of its constituents posting losses, led by the utilities, IT and industry stocks.

ACWA Power slipped 2.3% and Al Rajhi Bank , the world's largest Islamic lender, dropped 1.2%.

(Reporting by Md Manzer Hussain; Editing by Varun H K)