Mideast Stocks: Most Major Gulf Markets Gain on US Rate Cut Optimism

Major stock markets in the Gulf edged higher in early trade on Monday, helped by mounting expectations of a U.S. Federal Reserve rate cut this month, although weak oil prices capped gains.

U.S. job growth weakened sharply in August, and the unemployment rate increased to a nearly four-year high of 4.3%, confirming that labour market conditions were softening and sealing the case for a Fed rate cut next week.

Traders have fully priced in a 25-basis point (bp) cut, with an 8% chance of a jumbo 50-bp rate cut, according to the CME FedWatch tool.

The Fed's stance carries weight in the Gulf, where most currencies are pegged to the U.S. dollar, anchoring regional monetary policy.

Saudi Arabia's benchmark index, in a choppy trading session, added 0.1%, helped by a 0.8% rise in Saudi Arabian Mining Company.

Oil prices - a catalyst for the Gulf's financial markets - climbed more than $1, regaining some of last week's losses, helped by the prospect of more sanctions on Russian crude after an overnight strike on Ukraine.

OPEC+ flagged plans to further increase production from October, but the amount was modest.

Brent crude is projected to average $67.65 per barrel in 2025, as increased supply from major producers and U.S. tariff threats limit demand, per a Reuters poll.

Dubai's main share index was flat.

In Abu Dhabi, the index inched 0.1% higher.

The Qatari benchmark rose 0.1%, supported by a 0.6% rise in petrochemical maker Industries Qatar.