Most major stock markets in the Gulf edged higher in early trade on Tuesday, ahead of the U.S. Federal Reserve’s widely expected interest rate cut on Wednesday, with bets tilted towards an outsized move.

Markets currently see a 69% chance of a 50-basis-point rate cut. Monetary policy in the Gulf Cooperation Council (GCC), which includes the UAE, often aligns with the Fed’s decisions as most regional currencies are pegged to the U.S. dollar.

Dubai’s main share index inched 0.1% higher, helped by a 0.6% gain in property developer Emaar Properties.

In Abu Dhabi, the index added 0.1%.

Saudi Arabia’s benchmark index eased 0.1%, hit by a 0.2% fall in aluminium products manufacturer Al Taiseer Group.

Gulf markets end mixed ahead of Fed rate decision

However, Saudi Arabian Mining Company (Ma’aden) jumped 4.8%, a day after it signed a non-binding agreement with Aluminium Bahrain (Alba) to pursue a potential business combination that would create a global powerhouse.

On Sunday, U.S.-based aluminium maker Alcoa said it would sell its 25.1% stake in its joint venture with Ma’aden to the company for about $1.1 billion in cash and stock.

The Qatari benchmark gained 0.2%, with the Gulf’s biggest lender Qatar National Bank rising 0.6%.

Oil prices - a catalyst for the Gulf’s financial markets - extended gains as the market eyed U.S. output concerns in the aftermath of Hurricane Francine and expectations of lower crude stockpiles.