The ongoing US-Iran conflict has dealt a serious blow to the Dubai Financial Market (DFM), one of the region's most prominent exchanges. What had been a thriving market is now at the center of a geopolitical storm with no clear end in sight.
The conflict escalated on February 28, 2026, after coordinated US-Israeli airstrikes targeted Iranian missile launch sites and nuclear research facilities. Iran's response was swift and damaging. Iran shut the Strait of Hormuz, which handles nearly 30% of global seaborne crude oil trade, amplifying energy market fears worldwide.
Dubai felt the impact almost immediately. The UAE's financial regulator announced that the Dubai Financial Market and Abu Dhabi Securities Exchange would remain closed on Monday and Tuesday, following hundreds of Iranian missile and drone attacks on UAE territory. Historically, no Middle Eastern state had closed its stock exchange during a time of regional conflict, making the decision an extraordinary one.
When trading resumed, the numbers were grim. The Dubai Financial Market General Index plunged 4.65% at the open, while Dubai's real estate and banking counters bore the brunt of selling pressure. State-owned bank Emirates NBD led losses, falling 5.2%.
The physical damage to Dubai's infrastructure made things worse. Iran's strikes hit civilian and commercial areas, including Dubai's international airport, hotels, and Amazon data centers. Tourism suffered sharply, with hotel bookings falling and economic activity across Dubai facing paralysis.
Analysts are now watching how long the conflict lasts. Citi analysts warned the escalation could have a profound and potentially long-lasting impact on the MENA region, with Emaar and Emirates NBD among the most exposed firms.
Some economists argue that a temporary market closure will have a limited long-term impact if economic fundamentals remain strong. But, with the Strait of Hormuz closed and drone strikes continuing, investor confidence in Dubai as a stable financial hub is being tested in ways it never has been before.