Dubai stocks fell 0.6% early Wednesday, leading a broader Gulf retreat as renewed U.S.-Iran hostilities rattled investors after peace talks stalled.
Iran's missile attacks targeting Bahrain, Kuwait and other regional sites were intercepted or failed, the U.S. military said, while Tehran's Revolutionary Guards claimed an attack on the U.S. Fifth Fleet headquarters.
Abu Dhabi's index lost 0.5% and Qatar's slipped 0.3%; in Dubai, Emirates NBD dropped 1.1% and Emaar Properties fell 0.9%.
Saudi Arabia's benchmark bucked the regional trend, edging up 0.2% as ACWA Power gained 1.3%.
The market pullback came despite last week's preliminary U.S.-Iran understanding to stop the war, which neither side has formally endorsed and which conflicting accounts on ongoing talks have further clouded.
With its Supreme Leader gone, how will Iran's promised 'stronger response' reshape the Middle East?
As the Strait of Hormuz remains frozen, is a new global economic crisis now inevitable?
2026 Middle East Conflict: Oil Shock, Gulf Market Turmoil, and the Global Stagflation Threat
Overview
In early 2026, U.S. and Israeli strikes on Iran's leadership triggered a sharp escalation in Middle East conflict, leading Iran to retaliate with missile attacks on Israel. This set off a chain reaction: Gulf Arab countries went on high alert, global markets became highly volatile, and Gulf stock markets saw notable declines. Oil prices surged as fears grew over disruptions in the Strait of Hormuz, a key global supply route. The UN warned of uncontrollable consequences, while diplomatic efforts stalled. The crisis exposed deep vulnerabilities in Gulf economies and raised the risk of global inflation and recession, with investor confidence shaken worldwide.