• Investors await Fed’s meeting
  • Oil prices rise on Middle East tensions
  • Gulf stock markets retreat
  • Dollar rises, gold drops

Global markets

Investors are awaiting this week’s United States Federal Reserve meeting in light of recent market expectations that the U.S. central bank could cut interest rates as much as three times this year.

According to a Reuters report, some strategists say that stocks are primed for a selloff should the Fed fail to take an even more dovish tilt.

The Dow Jones Industrial Average fell 17.16 points on Friday, or 0.07%, to 26,089.61, the S&P 500 lost 4.66 points, or 0.16%, to 2,886.98 and the Nasdaq Composite dropped 40.47 points, or 0.52%, to 7,796.66.

MSCI’s broad gauge of stocks across the globe shed 0.33%, while the pan-European STOXX 600 index lost 0.40%.

“We’re going to be on pins and needles until we get some indication from the Fed,” Brian Battle, director of trading at Performance Trust Capital Partners in Chicago, told Reuters.

“That’s what matters. Everybody is betting that the Fed is going to cut rates, probably not in June but soon. That is a very crowded trade.”

Oil prices

An attack last week on two oil tankers in the Gulf of Oman lifted oil prices on Friday.

Brent futures settled 70 cents, or 1.1%, higher at $62.01 a barrel, while U.S. West Texas Intermediate (WTI) crude futures rose 23 cents, or 0.4%, to close at $52.51.

On Friday, a U.S. official said Iranian military fast-boats in the Gulf of Oman were preventing two privately-owned tug boats from towing away one of the damaged tankers.

“The possibility of what we’ve seen (in the Middle East) over the past few days could intensify into the weekend and traders are reluctant to be short in front of that,” Anthony Headrick, energy market analyst at CHS Hedging LLC in Inver Grove Heights, Minnesota, told Reuters noting that “The recent headline of restricting those tug boats got some traders off the fence to cover shorts.”

Middle East markets

All Gulf stock markets dropped on Thursday, as an attack on two oil tankers in the Gulf of Oman weighed on investor sentiment.

The Saudi index fell 1.6 percent, Al Rajhi Bank slid 1.9% and heavyweight petrochemical maker Saudi Basic Industries shed 2.2%.

In Dubai, the index was down 1.2% with 22 of its stocks declining and one rising. Emaar Properties closed 1.5% lower, while Dubai Islamic Bank lost 1.4%.

The Abu Dhabi index slipped 0.5% with Abu Dhabi Commercial Bank dropping 2.4% and Aldar Properties retreating 3.7%.

The Qatari index fell 1% as Masraf Al Rayan dropped 2.4 percent and Qatar Fuel fell 1.9 percent.

Egypt's blue-chip index edged up 0.2%, helped by Sixth Of October Development and Investment which gained 5.8%.   

Kuwait’s premier market index fell 1%, Bahrain’s index edged 0.1 percent lower and Oman’s index dropped 1.1 percent.

Currencies

Positive U.S. retail sales data helped boost the dollar on Friday.

The dollar index, which measures the greenback against a basket of six major currencies, rose 0.58%.

Precious metals

Gold prices fell on Friday on a stronger dollar.

Spot gold dipped 0.2% to $1,339.49 per ounce as of 1755 GMT.

U.S. gold futures settled 0.1% higher to $1,344.50 per ounce.

(Reporting by Gerard Aoun; Editing by Mily Chakrabarty)

(gerard.aoun@refinitiv.com)


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