Saudi Arabia’s stock market rebounded Sunday as weaker U.S. employment data reduced expectations for another Federal Reserve rate increase and firm oil prices improved sentiment across much of the Gulf.
Saudi Arabia’s benchmark TASI gained 1.1%, breaking from a period that had produced five consecutive weekly declines.
Al Rajhi Bank climbed 1.7%, while Saudi Aramco gained 0.6%.
The move illustrates the unusually direct relationship between U.S. monetary policy and Gulf financial markets.
September U.S. nonfarm payrolls increased by only 29,000, substantially below the 90,000 expected, while August job creation was revised down to 133,000 from 162,000.
After the report, markets priced approximately an 80% probability that the Federal Reserve would leave rates unchanged this month, up from 74% before the employment data.
That shift matters across the Gulf because most regional currencies are pegged to the U.S. dollar, causing Federal Reserve policy to exert substantial influence over local monetary conditions.
Oil provided additional support. Brent had settled Friday at $102.25 a barrel, while global physical supply remains constrained.
The regional performance was not uniform. Qatar’s benchmark slipped 0.1%, while Egypt’s EGX30 gained 1.6%.
For Gulf investors, the next major variable remains the interaction between U.S. monetary policy and energy prices.
Softer U.S. rates can ease financial conditions across dollar-linked Gulf economies, but elevated oil prices and geopolitical risks continue to produce unusually volatile conditions for regional markets.
