Gulf markets mixed on US rate cut hopes

Gulf stock markets closed mixed on Monday, as optimism rose over a potential U.S. Federal Reserve rate cut.

Dovish comments from Federal Reserve Governor Christopher Waller and New York Fed President John Williams, combined with weaker-than-expected U.S. economic data, have solidified market expectations for a December rate cut.

CME FedWatch Tool currently prices in an 87% probability of easing from 30% earlier in November.

Core U.S. Personal Consumption Expenditures figures on Friday could provide further cues on the Fed’s monetary policy path.

Shifts in U.S. monetary policy have a significant impact on Gulf markets, where most currencies are pegged to the dollar.

In Qatar, the index edged 0.1%, helped by a 1.4% rise in the Gulf’s biggest lender Qatar National Bank.

Saudi Arabia’s benchmark index dropped 0.5% on a 0.5% fall in Al Rajhi Bank and a 0.9% slide in oil major Saudi Aramco.

Elsewhere, Cherry Trading plunged 5.7% to 26.5 riyals in its debut trade.

“Risk-off” sentiment continues even though the non-oil economy remains backed by solid fundamentals and a positive growth outlook. Neither the rebound in oil prices nor the anticipated December Fed rate cut was enough to lift sentiment, said Daniel Takieddine Co-founder and CEO, Sky Links Capital Group.

“Additionally, liquidity remains constrained due to the high volume of initial public offerings introduced on the market this year.”

Oil prices - a catalyst for the Gulf’s financial markets - rose 1% as the Caspian Pipeline Consortium halted exports after a major drone attack and U.S.-Venezuela tensions raised concerns about supply, while OPEC+ agreed to leave oil output levels unchanged for the first quarter of 2026.

Brent crude futures advanced 71 cents, or 1.14%, to $63.09 a barrel at 1143 GMT. The contract settled down on Friday for the fourth consecutive month, its longest losing streak since 2023, as expectations for higher global supply weighed on prices.

Crude prices, even after the recent rebound, are still hovering near multi-month lows, putting pressure on the fiscal balances of oil-dependent Gulf nations through lower revenues.

Outside the Gulf, Egypt’s blue-chip index lost 0.2%, hit by a 2.1% drop in Telecom Egypt.