Saudi Arabia’s stock market rose on Sunday after Friday’s speech by US Federal Reserve Chair Jerome Powell confirmed the United States would soon begin interest rate cuts.

Federal Reserve Chair Jerome Powell on Friday endorsed an imminent start to interest rate cuts, saying further cooling in the job market would be unwelcome and expressing confidence that inflation is within reach of the US central bank’s 2% target.

Traders increased bets for a bigger rate cut in September following Powell’s speech, with the fed funds futures now pricing in a 37% chance of a 50 basis point cut next month, up from about 25% late on Thursday.

Traders are also pricing in about 106 bps of cuts by the end of the year.

Most stock markets in Gulf gain ahead of US job data, Fed minutes

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

Saudi Arabia’s benchmark index advanced 0.6%, with Saudi Telecom Company jumping 9.9%, after the telecoms company announced a 0.55 riyal per share quarterly dividend for the next three years starting from fourth-quarter.

Elsewhere, oil giant Saudi Aramco gained 0.7%.

Oil prices on Friday jumped more than 2%, rebounding after losses earlier in the week on swelling US crude stocks and a weakening demand outlook in China.

The Qatari benchmark eased 0.2%, hit by a 0.7% fall in Qatar Islamic Bank.

Outside the Gulf, Egypt’s blue-chip index lost 0.2%, with Commercial International Bank Egypt down 1.1%.

SAUDI ARABIA rose 0.5% to 12,263

QATAR eased 0.2% to 10,105

EGYPT lost 0.2% to 30,074

BAHRAIN dropped 0.5% to 1,930

OMAN gained 0.3% to 4,688

KUWAIT lost 0.5% to 7,764