Major stock markets in the Gulf were subdued on Tuesday amid concerns of weak oil demand, even as rising expectations of a US interest rate cut next month provided some support.

Oil prices, a catalyst for the Gulf’s financial markets, edged lower on easing worries about a supply disruption in the Middle East and as worries about China’s economic weakness also weighed on the demand outlook.

In Qatar, the index eased 0.1%, with Qatar International Islamic Bank losing 1.2%. Dubai’s main share index lost 0.1%, with Parkin Co, which oversees public parking operations in the Emirates, down 1.4%.

In Abu Dhabi, the index was flat. Saudi Arabia’s benchmark index edged 0.1% higher in choppy trade, helped by a 1% rise in Al Rajhi Bank.

Oil giant Saudi Aramco was down 0.7%.

Most Gulf markets in black on US rate-cut hopes

The US Federal Reserve will cut interest rates by 25 basis points at each of the remaining three meetings of 2024, one more reduction than predicted last month, according to a slim majority of economists polled by Reuters who said a recession is unlikely.

Fed policymakers have in recent days signalled a potential rate easing in September.

Monetary policy in the six-member Gulf Cooperation Council (GCC) is usually guided by the Fed’s decisions as most regional currencies are pegged to the US dollar.