Gulf Stock Markets Rise on US Rate Cut Optimism

Stock markets in the Gulf region have started the week on a positive note, with slight gains driven by optimism surrounding potential US interest rate cuts and anticipated higher fuel demand during the upcoming summer travel season. The monetary policies of Gulf Cooperation Council (GCC) countries are closely tied to the decisions of the Federal Reserve, as most regional currencies are pegged to the US dollar.

In May, US monthly inflation remained stable, with a rise in service costs offset by a significant decline in goods prices. This has brought the Federal Reserve closer to considering rate cuts later in the year. Saudi Arabia's main stock index saw a modest increase of 0.1%, supported by gains in Al Taiseer Group and Saudi Aramco. The recent announcement of new oil and gas reserves in the kingdom has also contributed to positive market sentiment.

The surge in crude oil prices, a key factor for Gulf markets, has continued following a strong rally in the previous session. As the summer travel season kicks off in the US, the world's largest oil consumer, gasoline demand is expected to rise, especially with the upcoming Independence Day holiday. Dubai's primary share index rose by 0.4%, driven by gains in toll operator Salik Co. Abu Dhabi's index also saw a 0.1% increase, while Qatar's benchmark index edged up by 0.1%, supported by gains in Qatar National Bank.

The positive momentum in the Gulf region's stock markets reflects the impact of global economic trends and regional developments. Investors are closely monitoring US economic indicators and geopolitical events that could influence market dynamics in the coming months. As the summer season progresses, the demand for energy and related commodities is expected to remain a key driver for market performance in the Gulf region.