jats:titleAbstract</jats:title> jats:pRecent studies have shown that the large-scale gas dynamics of protoplanetary disks (PPDs) are controlled by nonideal magnetohydrodynamics (MHD), but how this influences dust dynamics is not fully understood. To this end, we investigate the stability of dusty, magnetized disks subject to the Hall effect, which applies to planet-forming regions of PPDs. We find a novel background drift Hall instability (BDHI) that may facilitate planetesimal formation in Hall-effected disk regions. Through a combination of linear analysis and nonlinear simulations, we demonstrate the viability and characteristics of BDHI. We find it can potentially dominate over the classical streaming instability (SI) and standard MHD instabilities at low dust-to-gas ratios and weak magnetic fields. We also identify magnetized versions of the classic SI, but these are usually subdominant. We highlight the complex interplay between magnetic fields and dust-gas dynamics in PPDs, underscoring the need to consider nonideal MHD like the Hall effect in the broader narrative of planet formation.</jats:p>