Five Things to Know Before the Tel Aviv Market Opens

Tel Aviv stocks are set to open after another turbulent global session, but with Asian markets recovering and U.S. futures turning higher. South Korea’s tech-heavy market is up about 3% after a 10% drop yesterday, Nasdaq futures are rising around 0.5%, and dual-listed Israeli shares are mixed, with Camtek, Nova and Tower starting with negative arbitrage gaps of about 2.5%, while Enlight, NICE and Teva are expected to open higher.

The local market closed mixed yesterday after recovering from morning losses that reached about 2%. Even so, the TA-125 entered correction territory, meaning it has fallen 10% from its peak, for the first time since October 2023. Phoenix chief economist Matan Shtrit said that after a roughly 40% rise in the TA-125 over the past 12 months, a 10% correction is not unusual and is part of the market cycle, while real-economy data still point to growth, a tight labor market and lower rates ahead.

Wall Street remained under pressure yesterday, led by technology and growth shares. The Nasdaq fell 2%, the S&P 500 lost 1.3%, and the Dow Jones held near flat. Memory-chip funds were hit hard, with DRAM and SOXX ETFs dropping 14% and 8%, though defensive stocks and some large tech names such as Microsoft and Amazon helped limit losses. Investors are now focused on Micron’s results tonight, which are expected to show about 276% revenue growth to $34 billion to $35 billion and EPS of $19 to $21. Alphabet also joined the Dow Jones, replacing Verizon.

Bond markets were stronger in Tel Aviv and in the U.S. Local Tel Bond 20 rose 0.2%, erasing its monthly decline, and government bonds also climbed as markets price in a possible July rate cut. In the U.S., Treasury yields fell 1 to 3 basis points, led by the two-year note at about 4.20%, ahead of tomorrow’s personal consumption data. The dollar index stabilized, gold fell for a second day, and the shekel traded at 2.99 per dollar after a roughly 7% monthly drop.

Globally, the yen remains under severe pressure near 161.9 to the dollar, with traders watching for possible Japanese intervention if the pair breaks 162. Analysts also highlighted how intervention could disrupt U.S. Treasury markets and unwind carry trades. Brent crude slipped below $77 a barrel after reduced tanker activity in the Strait of Hormuz, while Bank of America sharply raised long-term semiconductor forecasts, lifting Micron’s target to $1,500 and increasing targets for Intel, Applied Materials, Lam Research and KLA.