In early trade on Tuesday, major Gulf stock markets were mixed, as prospects of a U.S. rate cut in December were revived by dovish remarks by Federal Reserve policymakers.
Fed Governor Christopher Waller stated on Monday that the labor market has become soft enough to warrant a 25-basis-point rate reduction at the December meeting, even though additional easing would depend on a series of economic data that was postponed during the recent government shutdown.
The comments come after New York Fed President John Williams noted on Friday that interest rates are probably going to fall “in the near term.”
According to the CME FedWatch Tool, investors are now pricing in an 81 percent probability of a December rate cut, having been 40 percent last week.
The Gulf markets are highly influenced by the change in U.S. monetary policy because most of their currencies are pegged to the dollar.
The Dubai main share index increased 0.4 percent, with toll operator Salik Company up 1.7 percent and blue-chip developer Emaar Properties surged 1.1 percent.
The state news agency announced on Sunday that Dubai has given its approval to a budget 2026-2028 that will witness 302.7 billion dirhams ($82.42 billion) in expenditures and 329.2 billion dirhams ($89.64 billion) in revenues.
The index in Abu Dhabi was up 0.2 percent, the benchmark index of Saudi Arabia fell by 0.2 percent, dropped by 1.2 percent in oil behemoth Saudi Aramco, and fell by 3.2 percent in the Saudi Tadawul Group.
Bloomberg News reports that Saudi Aramco is considering raising several billion dollars by selling multiple assets.
Oil prices, which have driven the financial markets in the Gulf that have relaxed on Tuesday with concerns that the supply will surpass the demand next year, taking precedence over the worries that Russian shipments will still be under sanctions as negotiations to end the Ukraine war are yet to be finalized.
Thus, the Qatari index dropped by 0.7 percent, and Qatar Islamic Bank fell by 0.7 percent.
