Iran-Israel-US war impact: Dubai stock market drops 5%; Israel hits record

Middle East markets reel as Iran conflict escalates. Dubai drops 4.6 per ceny, Abu Dhabi slides, Saudi fluctuates, but Israel stocks surge to new highs.

Iran-Israel-US war latest update (March 4, 2026): Major stock exchanges in West Asia reopened for full-day trading for the first time since the US-Israel-Iran war erupted on February 28, triggering sharp volatility across regional financial markets. 

While Gulf markets extended losses amid rising geopolitical tensions and infrastructure damage, Israel’s benchmark index defied the regional selloff and scaled fresh record highs.

 

UAE stock markets reopen sharply lower

Dubai Financial Market and Abu Dhabi Securities Exchange resumed trading after being shut for two sessions under directions from the UAE Securities and Commodities Authority amid escalating military conflict. 

At the open on Wednesday, the Dubai Financial Market General Index (DFMGI) plunged 4.65 per cent (302 points) to 6,201. The ADX benchmark fell 2.78 per cent (309 points) to 10,156.

 

Real estate, financials lead declines

Dubai’s real estate and banking counters bore the brunt of selling pressure. Shares of Amlak Finance, DEWA, Dubai Investments, Emirates NBD, Mashreq, and Dubai Residential REIT fell up to 5 per cent in early trade. 

In Abu Dhabi, Aldar Properties, Abu Dhabi National Hotels, and Adnoc Distribution declined nearly 5 per cent.

Infrastructure damage intensifies investor jitters

  Dubai has suffered significant infrastructure damage amid drone and missile strikes linked to the widening conflict. Reports indicate that the US consulate, embassy facilities, Dubai International Airport, and several hospitality assets were hit during Iranian drone offensives targeting Gulf infrastructure. 

The temporary market closure on Monday and Tuesday was aimed at curbing panic selling and stabilising liquidity conditions.  CHECK Stock Market LIVE Updates 

Saudi Arabia’s Tadawul shows volatility

Saudi Exchange (Tadawul) witnessed sharp swings over the past three sessions. On March 1, the Tadawul All Share Index (TASI) opened nearly 4 per cent lower versus its February 26 close of 10,709. The index recovered intraday but slid again on March 2, touching 10,366. 

By March 3, it trimmed losses to close at 10,565.75.

  Energy-linked stocks provided some cushion as rising crude oil prices — Brent above $81 per barrel — supported oil majors. However, broader investor sentiment remained cautious. 

Markets were yet to open for March 4 at the time of reporting.

 

Other Gulf markets under pressure

    • Oman’s MSM index declined around 3 per cent on March 1. 

    • Egypt’s EGX 30 dropped nearly 5.4 per cent.

  • Kuwait’s stock exchange suspended trading amid exceptional volatility and regional security concerns.

 

Israel stock market defies regional selloff, hits record high

In contrast, Israel’s equity market rallied strongly despite the ongoing war.

Tel Aviv Stock Exchange benchmark TA-35 index surged 4.61 per cent on March 2 to close at a record high of 4,318.50. 

The broader TA-125 index jumped 4.75 per cent to 4,268.43, also marking a fresh all-time high. 

The rally reflects strong domestic institutional participation; defence and cybersecurity stocks benefiting from heightened military activity; expectations of US military and fiscal support; and investor belief that Israel’s core economic infrastructure remains resilient. 

What triggered the Iran-Israel-US war?

The conflict escalated on February 28, 2026, after coordinated US-Israeli airstrikes reportedly targeted Iranian missile launch sites and nuclear research facilities. 

In response, Iran has shut the Strait of Hormuz which handles nearly 30 of global seaborne crude oil trade, amplifying global energy market fears.

  US President Donald Trump has indicated that the conflict could last “four to five weeks,” raising concerns of prolonged regional instability.