The global risk-off sentiment could affect stock markets in the GCC, in the same way it affects other stock markets worldwide as investors focus on the risks of a recession in the US. The concerns that the Federal Reserve could be late in reducing its interest rates could reverberate in all financial markets. A recession in the US could have a broad economic impact and could affect the economies in the GCC. The risk-off sentiment could also drive global investors away from emerging markets and others and toward safe-haven assets, potentially leaving stock markets in the GCC with less liquidity. At the same time, if the Federal Reserve moves toward a more aggressive interest rate cut cycle, the GCC stock markets and economies could benefit from lower financing costs, in particular if the US economy remains resilient. However, in the meantime, stocks in the GCC could remain under pressure as investors reassess their investment scenarios and consider new economic data.