Iran conflict threatens Middle Eastern consumer spending sentiment, luxury stocks decline

LootboxPhobia · 2026-03-02T19:47:53+00:00

Luxury stocks fell on Monday, as Morgan Stanley analysts pointed out that the US and Israel's strikes on Iran have affected Middle Eastern consumer spending, especially during the upcoming Ramadan shopping peak. Analysts are concerned that new violent conflicts will suppress luxury consumption.

LootboxPhobia

2026-03-02 19:47:53

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Investing.com - On Monday, luxury goods stocks declined, with Morgan Stanley analysts emphasizing that U.S. and Israel strikes on Iran have impacted consumer spending in the Middle East.

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LVMH, the parent company of Louis Vuitton listed in Paris, fell over 3%, Gucci’s parent company Kering dropped 4.3%, Swiss Richemont declined more than 6%, and British Burberry decreased 4%. Ferrari, the sports car manufacturer, also dropped 3.8% in pre-market trading in the U.S.

Morgan Stanley analysts estimated in a report that the Middle East accounts for about 5% of luxury goods sales, with the UAE being the largest single market in the region.

They added that consumer spending in the area tends to concentrate in the second half of Ramadan, especially before Eid al-Fitr, which this year falls on March 19 and 20. However, analysts including Natasha Bonnet and Edouard Aubin noted that the outbreak of new violence in the region could affect luxury spending during this so-called “Ramadan shopping peak.”

On Saturday, the U.S. and Israel announced joint strikes against targets across Iran, resulting in the deaths of several senior Iranian officials, including Supreme Leader Ayatollah Ali Khamenei. Reuters reported that U.S. President Donald Trump urged Iranian opposition groups to overthrow the long-standing oppressive regime, although many U.S. officials remain skeptical about an imminent regime change.

Uncertainty mainly revolves around how long Washington plans to stay involved in the conflict. Trump told The New York Times that the strikes could last “four to five weeks.” He also refused to provide specific details on how he envisions Iran’s transition, saying he has “three very good options,” but “won’t reveal them now.”

These strikes have prompted Tehran to retaliate against targets across the Middle East, including oil-producing Gulf countries.

This article was translated with the assistance of artificial intelligence. For more information, please see our Terms of Use.

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