Israeli and US Markets Plunge Amid Political Uncertainty, Dollar Surges

Israeli and American financial markets experienced significant declines on Thursday, driven by political uncertainty following Israel's legislative elections and the US midterm elections. Concurrently, the dollar strengthened against the shekel, reaching 3.20 shekels during trading, its highest point in seven months. The Bank of Israel reported the dollar at 3.1670 shekels, a 0.32% increase, while the euro rose slightly to 3.5535 shekels, up 0.05%.

On Wall Street, initial optimism over the Democratic Party's midterm election victories quickly evaporated, leading to a wave of selling. Technology stocks, especially in the semiconductor and artificial intelligence sectors, were hit hardest, with investors concerned about potential increased US regulatory scrutiny.

This apprehension caused major US indices to fall sharply. The Nasdaq, heavily weighted with tech stocks, dropped approximately 3.5%, and the S&P 500 lost over 2%. These movements signaled a rapid shift in investor sentiment after initial market reactions to the election results.

In Israel, the Tel Aviv Stock Exchange also closed lower, extending a downward trend that began after the legislative election results were announced. Uncertainty surrounding the formation of the next Israeli government, coupled with concerns about the new US political landscape, is weighing on the markets. The TA-35 index fell 3.7%, the TA-125 declined 3.4%, and the TA-90 dropped 2.9%.

Israeli defense companies were particularly affected, with their stocks falling around 7%. This period of market turbulence highlights investor nervousness regarding political uncertainties in both countries, with currency fluctuations adding to overall market volatility.