The UAE’s travel and tourism sectors have also suffered, with tens of thousands of flights canceled due to regional conflict. Tourism contributed $70 billion to the UAE economy last year, representing 13 percent of GDP. Disruptions to these services have amplified market volatility and shaken investor confidence.
BY PC Bureau
March 31, 2026: The United Arab Emirates’ financial markets have been among the hardest hit globally since the outbreak of the US-Israel war on Iran, losing roughly $120 billion in combined market value. Dubai and Abu Dhabi, the region’s two main financial hubs, have seen sharp declines in their benchmark indexes, reflecting heightened investor anxiety over regional instability.
Since February 28, when the United States and Israel launched coordinated strikes against Iranian targets, the Dubai Financial Market (DFM) General Index has fallen about 16 percent, translating to a loss of around $45 billion in market capitalization. Meanwhile, the Abu Dhabi Securities Exchange (ADX) General Index has dropped approximately 9 percent, or $75 billion in value.
Other Gulf markets have experienced a mixed impact. Qatar’s index has declined by roughly 4 percent and Bahrain’s by 7 percent, while Saudi Arabia and Oman have recorded gains during the same period, highlighting the uneven effects of the conflict across the region.
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On Wall Street, global investors have reacted nervously to the geopolitical uncertainty. The S&P 500 has fallen about 7 percent amid US President Donald Trump’s mixed messaging on the likely duration and objectives of the war.
Impact on Travel and Tourism
While the UAE’s economy is somewhat insulated from the global energy shock caused by Iran’s effective blockade of the Strait of Hormuz, the conflict has taken a toll on its status as a regional travel and tourism hub. Tens of thousands of flights have been canceled, especially on routes connecting to Dubai International Airport, the world’s busiest airport for international passengers.
Tourism and travel accounted for roughly $70 billion of the UAE’s economy last year, representing 13 percent of gross domestic product (GDP), according to state media reports. Disruptions in these sectors have compounded market losses, highlighting the economy’s sensitivity to geopolitical events despite its diversified portfolio.
Analysts: Short-Term Shock, Not Structural Damage
Experts stress that the market slump should be seen as a temporary disruption rather than a fundamental economic crisis.
Haytham Aoun, assistant professor of finance at the American University in Dubai, told Al Jazeera:
“It is clearly a short-term setback to investor sentiment and market confidence, but not necessarily a fundamental challenge to the UAE’s long-term economic plan. International financial centres are judged not only by market performance during crises but also by the quality of regulation, liquidity management, institutional resilience, and operational continuity.”
Burdin Hickok, a professor at New York University’s School of Professional Studies and a former Middle East-based US State Department official, echoed this view:
“From a long-term perspective, I don’t see this volatility as exceptional. The fundamental attractiveness of both stock markets is not changing, meaning regulatory or capital restrictions—which would be a more fundamental change—remain in place.”
UAE’s Financial Resilience
Despite their relatively modest size on the global stage, the UAE’s financial markets have grown steadily in recent years, reflecting the country’s ongoing efforts to diversify its economy beyond oil. The combined value of UAE-listed stocks surpassed $1 trillion in 2024, second only to Saudi Arabia’s $2.5 trillion market in the region.
Dubai, in particular, has steadily climbed the ranks of global financial centres. The latest Global Financial Centres Index, released last week by Z/Yen Partners in collaboration with the China Development Institute, ranked Dubai seventh worldwide—the city’s highest placement to date.
Under a 10-year economic plan unveiled in 2023, the UAE’s leadership has articulated an ambitious vision: to position Dubai among the top four global financial centres by 2033. Analysts argue that once a resolution to the conflict emerges, Dubai and Abu Dhabi are likely to see a rapid rebound, reflecting their enduring appeal to investors and businesses alike.
“The UAE’s stock markets have proven resilient in the past,” Hickok noted. “Once geopolitical risks ease, these markets could experience a serious recovery, reaffirming their role as leading hubs in the Middle East.”
