Tel Aviv Stock Exchange Ends June with Mixed Trading Amid Tech Slump and Real Estate Gains

The Tel Aviv Stock Exchange (TASE) opened the week with gains in leading indices but closed with a slight decline in the TA-125 index, primarily due to weakness in semiconductor stocks like Tower Semiconductor, influenced by negative trends on Wall Street. The local market is on track to close a notably negative month, with the flagship index down over 10%. While real estate sectors led gains during the day, with the TA Construction index rising 3.3% and the TA Real Estate index up 2.1%, technology stocks fell sharply, dragging the market down by 2% near closing. Residential real estate companies Aura, Rimon, and Gav Yam saw notable increases, reflecting investor expectations of future interest rate cuts. In the urban renewal sector, shares of Anshei HaIr and Rotshtein rose following Anshei HaIr’s exercise of a right of first refusal, blocking a sale to Gefen Housing and Renewal.

Security company Arasal surged after announcing a non-binding memorandum of understanding for a controlling stake sale to an ION Group investment fund at a premium valuation. Conversely, semiconductor stocks including Tower, Ormat, and Nova declined significantly. Retail giant Shufersal’s shares rose amid reports of a strategic shift to direct import of fresh and frozen meat, impacting competitors like Netto Melinda. Supergaz Power jumped 4.5% after confirming conditions were met for selling its subsidiary, while Gilat gained on $43 million in follow-up orders for satellite antenna systems. Valorix (formerly Aquarius Engines) rose on a memorandum to acquire a 70% stake in an electronic warfare company specializing in drone and communication jamming.

On Wall Street, major indices rebounded from last week’s tech sell-off, with the Nasdaq up 2.1%, S&P 500 rising 1.2%, and Dow Jones hitting a new record above 52,000 points. Gains were supported by a tentative ceasefire agreement between the US and Iran and easing tensions in the Strait of Hormuz. The "Magnificent Seven" tech giants led the rally, with ETFs tracking these stocks also rising. Semiconductor shares recovered with volatility, led by Broadcom, TSMC, Marvell, and AMD, while memory chip stocks showed mixed performance. Analysts view last week’s tech pullback as profit-taking rather than a fundamental shift.

In bond markets, Israeli government and corporate bonds remained stable, with long-term government bonds yielding 4.01%. US Treasury yields were steady ahead of critical employment data expected Thursday, which could influence Federal Reserve policy. SpaceX’s recent $25 billion bond issuance initially saw strong demand but quickly weakened in secondary trading, resulting in significant investor losses.

Currency markets showed the Israeli shekel strengthening against the US dollar, breaking below the 3-shekel threshold amid local stock market declines and profit-taking. Oil prices fluctuated due to geopolitical concerns and ceasefire news, with Brent crude around $72.41 and WTI near $70.25 per barrel. Gold prices fell over 1% amid easing Middle East tensions and rising US interest rate expectations, marking the metal’s worst month since 2008. Bitcoin showed early gains, surpassing $60,000, but retreated slightly by the afternoon.

Looking ahead, markets await the US June employment report, expected to show a sharp slowdown in job growth to around 114,000-118,000 new jobs and stable unemployment at 4.3%. Wage growth is forecast to remain moderate. Analysts warn the data could either ease inflation fears or raise recession concerns. Meanwhile, major investment banks like RBC and Goldman Sachs have raised their 12-month S&P 500 targets, citing strong corporate earnings growth driven by AI investments, signaling continued optimism for US equities despite geopolitical and bond market volatility.