Five Things to Know as Trading Opens on the Stock Exchange

Market review: live reports, trends, indices, stock prices, bonds, foreign exchange and commodities, and analyst recommendations

1. Stock market 8:35 The trading day is expected to open against the backdrop of a new wave of attacks carried out overnight by the United States against military infrastructure in Iran. In response, Iran carried out attacks against Gulf states, including Kuwait and Bahrain. President Trump said last night that if the Iranians do not agree to a deal today, the United States will attack them with force again today. After the sharp declines on Wall Street last night, dual-listed stocks are set to return with a notable negative arbitrage gap of 0.7%. Among the biggest decliners are the dual-listed chip stocks Nova and Camtek, which are expected to fall by about 5% and 4.4%, respectively. Teva is weakening by more than 1%, and Enlight Renewable Energy is dropping by more than 2%. This morning in Asia, the exchanges are trading in mixed fashion. The Tokyo and Seoul exchanges are rising by about 0.2%, the Hong Kong exchange is falling by about 1%, and the Shanghai exchange is weakening by about 0.2%. At the same time, futures on Wall Street are gaining up to 0.7%. Yesterday, tensions with Iran on one hand and ongoing fire from the north on the other dragged the Tel Aviv Stock Exchange lower, and the main indices turned red. The TA 35 index fell by about 0.9%, the TA 90 index dropped by 2.2%, and the TA 125 index lost about 1.2%. Leading the declines was the cleantech index, which fell by more than 4%. In particular, shares associated with data centers weakened, led by the real estate company Mega Or and the energy companies Nופר Energy and Meshak Energy. This was against the backdrop of reports that the Finance Ministry is considering imposing a tax on data centers in order to reflect their effect on the pace of gas reservoir consumption and electricity prices. Another possibility under review is requiring data centers to build adjacent power stations, as in the United States. After the cleantech index, the insurance and infrastructure indices stood out on the downside, falling by about 2.6% and 2.4%, respectively. The construction index weakened by about 2.2% and the banks index lost about 1.3%. By contrast, the TA Oil and Gas index rose by about 2.5%, on the back of higher oil prices around the world. Teva stood out positively after it was reported that its active pharmaceutical ingredients division, TAPI, will lay off 250 employees in Israel over the next two years. Against this background, in recent years Teva has tried to sell the division, but the move has not yet materialized. Another stock that lost ground was Mivtach Shamir, which initially rose at the start of trading after reports in the media that it was advancing an initial public offering of shares in its subsidiary Shamir Energy. But after the company clarified that, despite the reports, there had been no “significant development” in the activity, the stock moved into negative territory. Yaron Friedman, head of research in the investment division at Bank Leumi, addressed the climate in markets in Israel and abroad, and noted that, “Despite the ongoing security storm in the various arenas, Israel’s CDS continues to fall. In other words, despite the threats and the ongoing fighting in Lebanon, the local economy’s risk premium continues to narrow. This trend shows more than anything that, despite everything, foreign investors still view the local economy in a relatively positive light, and that is an important bright spot, especially on a day of falling prices.”

Last night on Wall Street, sharp declines were recorded, against the backdrop of Trump’s threats to attack Iran, together with a fresh wave of profit-taking in the chip sector, which led the negative trend. The tech-heavy Nasdaq fell by about 1.8%, the S&P 500 lost about 1.3%, and the Dow Jones weakened by about 1.5%. As noted, chip stocks, which in recent weeks had climbed to new heights at a stunning pace, continued to come under pressure yesterday. The SOXX ETF, which tracks chip stocks, lost more than 3%, with among the stocks posting notable declines Nvidia, Micron, Marvell, Broadcom, AMD and others. The XLK ETF, which tracks the technology sector on Wall Street, also weakened by more than 2%. Both are now in correction territory, meaning they have fallen more than 10% from their recent highs. It should be noted that last Friday the SOXX ETF posted its sharpest daily drop in six years and fell by more than 10%. On Monday it recovered and rose 5%, but later in the week it returned to trading lower. Server company Super Micro Computer plunged by more than 20% in Wall Street trading after announcing a $7 billion capital raise, wiping about $6.5 billion off its market value. According to the company’s official statement, the purpose of the plan is “to fund the purchase of components in order to fulfill the AI orders the company received in recent weeks for its advanced AI servers.” The company, which designs and manufactures server and storage systems, said it had received orders worth $39 billion in recent weeks for its AI servers. According to a MarketWatch report, the company plans to issue new shares worth $1.25 billion and depositary shares worth $3.75 billion, representing a proportional interest in the convertible preferred shares the company recently issued. In addition, the company plans to use an at-the-market sales program to sell common shares worth up to $2 billion, starting in the third quarter of 2026. Just last week, Alphabet (Google) announced plans for a massive $80 billion capital raise to fund its expansion in AI, a move that reignited concerns among some investors about the enormous capital expenditures of companies operating in the artificial intelligence arena. And speaking of capital spending in AI, shares of software giant Oracle plunged 10% in after-hours Wall Street trading after it released its earnings yesterday, despite beating analysts’ forecasts on both the top and bottom lines and raising its profit outlook for fiscal 2027. The main reason for the decline: capital expenditures in fiscal 2026 reached $55.66 billion, above market expectations of $50.85 billion. In addition, the company said it expects to raise $40 billion through debt and equity financing, including the sale of $20 billion in shares it announced earlier this year. This comes after it raised $43 billion in debt and $5 billion in equity in fiscal 2026, a move that worried investors because of uncertainty over whether demand for AI can justify such a scale of new capital. Alongside the geopolitical tensions, the market attributed yesterday’s declines to several factors. Some analysts believe investors are making room in their portfolios for SpaceX’s offering this coming Friday, which will be the largest initial public offering in history. Others believe this is profit-taking after the unprecedented rally posted by chip stocks in recent times, since even after the recent pressure these stocks have faced, the SOXX ETF is still up more than 80% since the start of the year. Marcie Northon, chief investment strategist at Empower Investments, told CNBC that, “If we are talking about the essence of what we have seen in recent weeks, it really centered on that same area of memory and chips that lifted the market. That was the real force behind everything, and it really ran so hard that it feels very close to toppy right now. So does that mean there is some kind of deterioration in market fundamentals? I am not so sure about that, but it certainly seems like there is tense sentiment and that we are getting some kind of correction.”

2. Bond markets In the United States, the bond market is already pricing in a rate hike. The 10-year government yield rose to more than 4.5%, and the yield on the two-year note, which is considered more sensitive to short-term interest rate changes, climbed to more than 4.13%, a more than one-year high, despite the Fed rate standing at 3.5% to 3.75%. In doing so, the U.S. bond market is sending a clear message to the new Fed chair, Kevin Warsh, who is due to decide on interest rates next Wednesday, June 17. Before taking office, he had repeatedly hinted that monetary policy was already restraining economic activity and that there was room for easing in the future. Now he faces a bond market signaling the opposite, that the Fed may be “behind the curve” in its fight against inflation.

3. Commodities and currencies After a long period of shekel strength against the dollar, in recent days the foreign exchange market appears to have changed direction, with the dollar weakening by about 2.5% since the start of the week and trading this morning at 2.96 shekels. The dollar’s comeback is being driven by two main reasons, the hint from the Bank of Israel governor about an interest rate cut and the security tensions with Iran, Lebanon, and now also Turkey. Beyond all this, the dollar is strengthening globally, as the DXY index, which measures its strength against major currencies, rose 0.5% over the past week. Jed Elbrock, portfolio manager at Argent Capital Management, told CNBC that, “The war story with Iran is of very significant importance. Investors may turn out to be right, that there is nothing to fear, that Trump will handle it, that we will get a deal with Iran and that the Strait of Hormuz will be opened; but if not, it feels like oil prices will have to rise a lot. In this investment environment, it is impossible to feel relaxed.” Oil prices are rising by about 1% this morning, amid the overnight exchange of blows between the United States and Iran. Brent crude is trading around $94 a barrel, while U.S. crude (WTI) is trading around $91 a barrel.

4. Macro The U.S. consumer price index rose 0.5% last month, in May, putting the annual inflation rate at 4.2%, in line with earlier expectations. This is the first time in three years that inflation has risen above 4%, mainly because of higher energy prices. However, core inflation, excluding volatile food and energy prices, rose 0.2% in May, below analysts’ expectations of 0.3%, putting annual core inflation at 2.9%. Ronen Menachem, chief economist at Mizrahi Tefahot, commented on the U.S. consumer price index and said that, “Today’s inflation figures are the highest in three years. However, the energy component, which jumped almost 4% in May alone, contributed 60% of the increase in the overall index. In general, over the past 12 months, the fuels component in all its forms has risen by no less than 40%. Therefore, although inflation rose in the bottom line, this is not a broad-based increase, but rather an unusual impact from one component. This also explains the gap between the rise in the overall index and the rise in the core index, which does not include energy and food. Incidentally, the food component rose only 0.2%, less than the increase in the overall index, and it remains to be seen whether the rise in fuel and its production inputs will have later effects in the next reports.” Menachem added that, “The more encouraging news comes from housing, which did rise 3.4% over the past 12 months, but that pace was lower than the increase in the overall index, including on a monthly basis, and in general there is a noticeable moderation in this component, which is the largest and most important in the entire index. The same is true of services excluding energy. These are two service components, and their moderation makes inflation less ‘sticky’, which may indicate the cumulative effect of higher interest rates in the U.S. Another finding with a familiar local flavor, airfares jumped 2.7% in May, and as in many places around the world, they are pulling the overall index higher.” “The bottom line is that although the index matched expectations, it generally pointed to a high and expanding price environment, and together with Friday’s strong employment report, which also surprised to the upside and pointed to strength in wages and employment, it will leave the Federal Reserve no choice but to keep interest rates unchanged and perhaps even consider a hike later this year. The market currently assigns a 40% probability that rates will rise by a quarter point in October,” Menachem concluded. It should be noted that another key inflation figure will be published in the United States today, the producer price index for May, which measures the pace of price increases at the wholesale level. After April’s index jumped sharply and showed a monthly increase of 1.4%, the forecast for May stands at 0.7%. As with the consumer price index, a larger-than-expected increase could fuel concerns about a higher inflation environment for longer, and further weaken already slim expectations for interest rate cuts in the United States in the foreseeable future. In Europe, expectations are rising that the European Central Bank will raise rates to 2.25% today. At the Swiss bank Pictet, analysts estimated that the Governing Council is likely to frame the move not as the start of a rate-hike cycle, “but as a recalibration intended to reaffirm its commitment to price stability.” Looking ahead, the Swiss bank says President Christine Lagarde is expected to keep all options open ahead of the next meetings. “A rate hike as a form of ‘insurance’ has become close to consensus, but further monetary tightening would pose greater risks to already weak growth and could encounter resistance from some of the dovish council members, especially in the absence of clear evidence of second-round effects,” the bank wrote.

5. Outlook SanDisk shares have eased somewhat from their recent peak, but since returning to trade on Nasdaq in February 2025 they have multiplied 47 times. This week, two analysts raised their price targets for the stock again. SanDisk, founded by Eli Harari, is a memory component manufacturer and, like others in the sector, is benefiting from strong momentum due to high demand for AI infrastructure, while supply remains limited. At Bank of America, the price target was raised from $1,550 to $2,100, a 27.5% premium, with a Buy recommendation. The analysts said demand remains strong and they expect the average selling price to rise at least through the first half of 2027. At Cantor, the price target was raised from $1,800 to $2,900, a 76% premium, with an Overweight recommendation, along with an upgrade for another company in the industry, Micron. At Cantor believe the supply shortage in the industry will continue in 2027 and 2028. Israeli startup developing a new solution to reduce premature births

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