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The Gulf markets are mixed in their reactions to the US rate cuts

The major Gulf stock markets were mixed early on Tuesday, after the Federal Reserve's dovish remarks revived hopes of a U.S. interest rate cut in December. Fed Governor Christopher Waller stated on Monday that the labor markets have softened enough to justify a rate cut of 25 basis points at the December meeting. However, any further easing depends on the release of economic data which was delayed due to the government shutdown. His comments follow New York Fed president John Williams' Friday comment that interest rates will likely decline "in a near-term."

According to the CME FedWatch tool, investors now price in an 81% probability of a rate reduction in December. This is up from 40% last Monday.

The U.S.'s monetary policy changes have an important impact on Gulf markets where the majority of currencies are pegged with the dollar.

Dubai's main stock index increased 0.4%. Toll operator Salik Company gained 1.7%, while blue-chip developer Emaar Properties rose 1.1%.

Dubai has approved a budget for 2026-2028 with 302.7 billion dirhams in expenditures, and 329.2 milliards dirhams in revenues. The state news agency announced this on Sunday.

In Abu Dhabi the index rose by 0.2%.

Saudi Arabia's benchmark stock index fell 0.2% due to a drop of 1.2% in the oil giant Saudi Aramco, and a decline of 3.2% in Saudi Tadawul Group.

Bloomberg News reports that Saudi Aramco has been exploring ways to raise billions of dollars by selling various assets. The oil prices, which are a major catalyst for Gulf financial markets, eased Tuesday due to concerns that the supply of oil will be greater than the demand in the coming year. This is more important than worries that Russian shipments would remain under sanctions because the talks to end Ukraine's war have not been conclusive.

Qatar Islamic Bank also lost 0.7%.

(source: Reuters)