Geopolitical conflict spreads to the financial heart of the Middle East! Multiple Gulf countries' US military bases attacked, UAE stock market rare two-day trading halt.

The United Arab Emirates stated that its two main stock markets will be closed for two trading days to avoid potential market collapse, as multiple Gulf countries have been repeatedly hit by Iranian missiles during Iran's retaliatory airstrikes against the US. According to the Emirates Securities and Commodities Authority, the Abu Dhabi Securities Exchange and Dubai Financial Market will be closed for all trading on March 2 and March 3. The authority also mentioned in an email statement that "the authority will continue to monitor the geopolitical situation in the region and take further measures as needed." Since early Saturday morning local time, Dubai and Abu Dhabi have been targeted by hundreds of missiles and drones from Iran in response to major airstrikes by the US and Israel. In the UAE, most of the missile attacks have been intercepted, and there are currently no reports of casualties or significant economic damage in multiple areas. However, these attacks have caused extreme panic among residents and posed a significant threat to the UAE's economic prospects, as it has long been one of the most stable financial, logistical, and tourist centers in the Middle East and globally. The new round of rapidly developing and unpredictable geopolitical conflicts in the Middle East has heightened anxiety and concerns among global investors. This has led to a strong demand for traditional safe-haven assets such as US treasuries, gold, and the Swiss franc. In the short term, financial market strategies will prioritize safe-haven assets, and funds may continue to flow rapidly and in large volumes from stocks and other risk assets to US treasuries, gold, safe-haven currencies, and commodities like oil and natural gas that benefit from the Middle East geopolitical crisis. Global traders suggest that all eyes will be on energy and safe-haven markets. When financial markets fully reopen on Monday, traders in the Asia financial markets are seeking safe-haven assets, as evidenced by an early 2% rise in spot gold prices in Monday's Asian session, a rapid increase in the US dollar against multiple currencies, a continued downward trend in the 10-year US Treasury bond yield to near the significant level of 3.90% indicating a sharp rise in US bond prices, a slight increase in the Swiss franc against major currencies, and stable movements in the Japanese yen. Meanwhile, the most anticipated market performance on Monday's opening will be seen in the international oil benchmarks - Brent crude futures prices surged up to 13% at one point, while WTI crude oil prices rose over 10%, but then immediately narrowed to around 7%. With US President Trump announcing that military actions against Iran will not cease until objectives are met, and the possibility of lasting for four weeks, as well as conflicts spreading beyond Iran and Israel to other Middle Eastern economies such as Iran targeting key US infrastructure in Dubai, Abu Dhabi, Bahrain, and Kuwait with drone and missile attacks, and Lebanon launching rocket attacks on Israel. The ongoing unpredictable geopolitical turmoil in the Middle East and the potential ripple effects of oil price increases have given fund managers new reasons to sell off stocks and other risk assets on a large scale, and further seek safe-haven assets, as well as commodities like oil that are expected to greatly benefit from the Middle East geopolitical tensions in the short term. The new round of geopolitical conflicts in the Middle East has led to increased demand for safe-haven assets, strengthening of US treasuries, gold, and safe-haven currencies, and downward pressure on stock markets due to market risk aversion sentiment. Investors are weighing whether to quickly seize opportunities to buy risk assets amid declines in stock markets and cryptocurrencies. Some Wall Street strategists warn against rushing to buy or catch falling stocks or other risk assets. Analysts Edmund Christou and Salome Skiltrae from Bloomberg Intelligence wrote in a report, "The widespread military threat from the US and Israel against Iran poses a risk of impacting the demand for real estate sales in the UAE, potentially affecting the absorption of up to 350,000 new supply units and the flow of 120 million visitors to Dubai global megamalls, as well as the crucial retail and hotel tourism industry in Dubai." Barclays bank's strategy team warned investors not to rush into buying any risk assets on dips, such as overvalued tech stocks. Investors are accustomed to rapidly resolving geopolitical conflicts, but this new round of Middle East events may last longer. Ajay Rajadhyaksha, global research chair at Barclays, pointed out in a report that considering potential casualties in the US military, ongoing strikes on Iranian leadership, and disruptions to the Hormuz traffic, this geopolitical conflict may last longer than previous ones. Stephan Kemper, chief investment strategist at BNP Paribas Wealth Management, stated, "I expect a significant drop in the stock market as it will affect market sentiment. The main downside risk comes from oil prices." "If oil prices remain high, it could affect global economic growth prospects and inflation data, making the Fed's path to rate cuts even more difficult. This could disrupt the recent strong rebound in global stock markets. If the impact of oil prices is limited, I would be more inclined to see any further correction as a long-term buying opportunity." The total market value of the UAE stock market is $1.1 trillion, making it the 19th largest stock market globally. Stocks in the country's stock market have an overall weight of 1.4% in the MSCI Emerging Markets Index. Overall, the closure of stock markets within the UAE is a rare occurrence. Unless it is a national public holiday, stock markets in the UAE are usually closed only during periods of national mourning, such as after the death of President Khalifa bin Zayed Al Nahyan in 2022. However, suspending stock market trading during times of significant economic uncertainty and turmoil is not uncommon for many countries. Recent examples include Turkey suspending stock market trading for a week after an earthquake in 2023, which was a significant factor in a major market surge upon reopening; Russia suspended financial market trading for about a month after attacking mainland Ukraine in 2022; in 2015, Greece closed the Athens Stock Exchange for about five weeks during the sovereign debt crisis, which also saw a significant market downturn upon reopening. In other important Gulf countries and regions, the Capital Markets Authority of Kuwait announced that the country's stock market will resume trading on March 2, following a temporary halt in stock market trading operations on Sunday.