Global Markets Open Mixed as Oil Prices Surge on Iran Tensions

Global markets experienced a predominantly negative sentiment at the start of the trading week, influenced by President Trump's rejection of Iran's proposal to open the Strait of Hormuz. This geopolitical development led to a rise in oil prices and an increase in U.S. Treasury yields.

Asian markets presented a mixed picture, with Tokyo's Nikkei down approximately 0.2%, Hong Kong's Hang Seng up around 0.6%, Shanghai's SSE Composite down about 1.7%, and Seoul's KOSPI declining by roughly 2.5%. South Korean chip giants Samsung and SK Hynix saw significant drops of over 4%. The declines in Shanghai were attributed to disappointing macroeconomic data, with China's industrial profits growing by only 4.2% in August, the lowest monthly growth rate this year, attributed to weak demand and rising energy costs.

Wall Street closed the previous week in positive territory, with the S&P 500 up 1.2%, the Nasdaq Composite up 2%, and the Dow Jones Industrial Average up 0.3%. However, futures trading in New York indicated a downturn, with Nasdaq futures down 0.8% and S&P 500 and Dow futures down 0.4%.

Key U.S. macroeconomic data this week, including employment and inflation figures, are expected to shape interest rate expectations. The September jobs report is due Friday, preceded by the JOLTS job openings survey on Tuesday and the ADP employment report on Wednesday. The Federal Reserve's preferred inflation measure, the PCE price index for August, will also be released Wednesday, alongside a second estimate of Q2 GDP growth. Micron Technology is set to report its fiscal Q4 earnings, with analysts anticipating a more than tenfold increase in earnings per share.

The Israeli Shekel weakened against the dollar, trading just above 3.05 shekels. Analysts attribute this to the Federal Reserve's recent interest rate hike, widening interest rate differentials in favor of the dollar, and increased regional risk premiums stemming from Houthi attacks on Saudi Arabia and concerns over escalation with Iran. Despite short-term volatility, Israel's current account surplus and the Bank of Israel's high foreign exchange reserves are seen as limiting the shekel's depreciation potential, while a de-escalation in the Persian Gulf could lead to shekel appreciation.

Oil prices climbed up to 2%, with Brent crude around $106.50 per barrel and WTI crude near $94 per barrel, following President Trump's rejection of Iran's proposal. In Tel Aviv, dual-listed stocks are expected to open with a negligible positive arbitrage gap. Tower Semiconductor, Nova, and Ormat are projected to rise 2-3%, while Palo Alto Networks is expected to fall over 3%, and Teva and Elbit Systems are anticipated to decline by about 1%. The trading week in Tel Aviv will be shortened due to the Sukkot holiday, with the exchange closing early and no trading on Friday. Last week, the Tel Aviv Stock Exchange saw declines, with the TA-35 index down 1.1%, TA-90 down 3%, and TA-125 down 1.5%. The TA-Energy and Gas index led the declines, down 4%, partly due to oil price volatility. NewMed Energy and Ratio's cancellation of a $6.7 billion gas supply deal is also expected to draw significant attention.