Most stock markets in the Gulf closed lower on Wednesday amid geopolitical tensions in the region, while investors awaited a key U.S. inflation report due this week for more clarity on the size of a likely September rate cut.

In the Middle East, fighting continued in the Gaza Strip between Israel and Hamas militants, displacing Palestinians, while there were few signs of a concrete breakthrough in ceasefire talks in Cairo. Over the weekend, Israel and Hezbollah bombarded each other with rockets and missiles across the Lebanese border.

United Nations aid operations in the Gaza Strip continued on Tuesday, a day after a senior U.N. official said humanitarian efforts had ground to a halt because new Israeli evacuation orders forced the shutdown of the main U.N. operations center.

Saudi Arabia’s benchmark index dropped 0.5%, with aluminium products Al Taiseer Group losing 1.9%, and Al Rajhi Bank declining 1.5%.

Dubai’s main share index was down 0.4%, with blue-chip developer Emaar Properties losing 1.5%.

In Abu Dhabi, the index dropped 0.5%.

Most Gulf markets ease on regional tensions

The Qatari index fell 0.3%, hit by a 0.6% decline in the Gulf’s biggest lender, Qatar National Bank QNBK.QA.

Market participants are looking forward to the release of the U.S. personal consumption expenditure (PCE) data, the Federal Reserve’s preferred measure of inflation, on Friday.

Traders have fully priced in a Federal Reserve easing for next month, with a 67% chance of a 25-basis-point cut and about a 33% chance of a bigger 50-bp reduction, according to the CME FedWatch tool.

Outside the Gulf, Egypt’s blue-chip index gained 1.1%, led by a 7.2% jump in tobacco monopoly Easter Company.

Egypt announced a new oil discovery in its Western Desert, the petroleum ministry said in a statement on Tuesday.

----------------------------------------- SAUDI ARABIA     fell 0.5% to 12,117 ABU DHABI        lost 0.5% to 9,289 DUBAI            dropped 0.4% to 4,324 QATAR            down 0.5% to 10,137 EGYPT            up 1.1% to 30,710 BAHRAIN          advanced 1.6% to 1,958 OMAN             rose 0.6% to 4,720 KUWAIT           eased 0.3% to 7,820-----------------------------------------