Israeli investors are heading into the opening after three straight days of losses in Tel Aviv, with the market down about 5% since the start of the week and approaching correction territory. Overnight, President Donald Trump signed an interim deal to end the war with Iran, pushing Asian markets higher and lifting Wall Street futures by about 1%, but local traders are still pricing in an agreement they see as unfavorable to Israel. Dan Ellis, head of capital markets research at Bank Hapoalim? actually the Foreign? The article says at the International Bank, said, “This is not a crisis,” but he also pointed to slowing macro data, including a 3.8% contraction in first-quarter GDP, a strong shekel hurting exports, and the closure of the Lehavim factory. He added that lower interest rates in Israel could be supportive, unlike the rate-hike backdrop abroad.
Oil prices are dropping again, to about $78 a barrel, after the opening of the Strait of Hormuz and amid warnings from the International Energy Agency about excess supply next year. That weighs on oil and gas and clean-tech stocks. Dual-listed shares are also expected to pressure the opening, with Tower, Camtek, Enlight and others indicated down around 2.5%, while NICE shows a negative arbitrage spread of more than 3%. The dollar is strengthening globally and trades about 0.8% higher against the shekel at 2.934 per dollar, after briefly jumping to 2.96 yesterday following the Federal Reserve announcement.
The Fed left rates unchanged at 3.75%, but its message was more hawkish than investors expected. The median forecast for the end of 2026 rose to 3.8%, signaling rates may stay higher for longer and that another hike could still come before cuts are considered. U.S. Treasury yields rose in response, with the 10-year at 4.47% and the 2-year at 4.14%. In Israel, markets expect the Bank of Israel to cut rates again in July after May CPI fell 0.3%, and analysts at IBI and Psagot both still see further easing ahead.
The biggest global market story remains SpaceX, whose stock has made it into the world’s five largest companies after a sharp post-listing rally. Morningstar says the shares are still “significantly overvalued,” putting fair value at about $63, roughly 70% below where they traded on June 16. The firm cited optimistic assumptions in its model, but also flagged Elon Musk’s near-total control, with about 82% of voting power. Nobel laureate Paul Krugman and investor Michael Burry also criticized the valuation, with Burry saying he reviewed bearish option trades but passed because put prices were too expensive.
