The United Arab Emirates’ financial markets have suffered sharp losses since the outbreak of the United States-Israel war on Iran, with combined market capitalisation in Dubai and Abu Dhabi falling by around $120bn, according to reports. Benchmark indices in both emirates have declined significantly, reflecting investor anxiety over regional instability, disrupted travel flows and uncertainty around energy markets, even as some neighbouring Gulf exchanges have shown resilience or gains.
Reports indicate that Dubai’s benchmark index has dropped about 16 % since February 28, while Abu Dhabi’s has fallen roughly 9 %. In absolute terms, the Dubai Financial Market (DFM) General Index has erased nearly $45bn in value, while the larger ADX General Index has shed approximately $75bn.
Elsewhere in the Gulf, Qatar and Bahrain have also recorded declines of about 4 % and 7 % respectively. However, Saudi Arabia and Oman have bucked the trend, posting gains during the same period.
On Wall Street, the S&P 500 has fallen around 7 %, with sentiment weighed down by mixed messaging from US President Donald Trump regarding the scope and duration of the conflict, reports said.
Although the UAE has been less exposed to energy supply shocks, despite Iran’s effective closure of the Strait of Hormuz, the war has hit another key pillar of its economy: aviation and tourism.
Tens of thousands of flights have reportedly been cancelled, particularly affecting routes through Dubai International Airport, the world’s busiest hub for international passengers. The disruption has dented the country’s reputation as a stable global transit and tourism centre.
Tourism and travel contributed roughly $70bn to the UAE economy last year, accounting for about 13 % of GDP, according to state media.
Despite the current downturn, the UAE’s capital markets remain among the most developed in the Middle East. The total value of listed stocks crossed $1 trillion in 2024, second only to Saudi Arabia’s $2.5 trillion market.
Dubai has also climbed to seventh place in the latest Global Financial Centres Index, its highest ranking to date. Under a long-term economic strategy unveiled in 2023, authorities aim to position the city among the world’s top four financial centres by 2033.
