Mixed Market Open Amid Rising Tensions in Strait of Hormuz and Oil Price Surge

The stock market is expected to open with mixed trends following increased tensions around the Strait of Hormuz and a sharp rise in oil prices. U.S. President Donald Trump stated overnight that the U.S. Navy has cleared mines from the strait and now controls it fully, describing the situation as a "steel wall." However, tensions persist as compensation demands escalate between Washington and Tehran. Asian markets showed mixed performance, with Hong Kong down 0.7%, Shanghai stable, and Seoul up 1.5%, led by a 5% rise in Samsung shares. U.S. futures edged higher, while dual-listed stocks in Tel Aviv are expected to open slightly lower, with notable declines in Tower Semiconductor and Elbit Systems.

Yesterday, the Tel Aviv 35 index closed down 0.3%, with the Tel Aviv 90 index falling 1.7%, led by a 3.1% drop in the construction sector. Banking and insurance sectors also declined, as did the defense index, mainly due to a sharp fall in Next Vision shares despite the company reporting a 138% revenue increase in Q2. Renewable energy company Doral announced a $415 million investment to increase its U.S. stake to 53.3%, causing its shares to initially jump 7% before settling with a modest gain. Max Stock reported a 30% net profit increase in Q2, driven by higher revenues and new store openings.

On Wall Street, major indices closed lower amid tech sector pressure and soaring energy prices. The S&P 500 fell 0.1%, Nasdaq dropped 0.3%, and Dow Jones declined 0.1%. Energy prices surged over 5% due to geopolitical concerns and doubts about a U.S.-Iran agreement to reopen the Strait of Hormuz. This spike influenced Federal Reserve rate hike expectations, with a more than 50% chance of a September increase. The 30-year U.S. Treasury yield rose to near a 19-year high, pressuring the real estate sector.

In commodities and currencies, the Israeli shekel strengthened about 0.4% against the dollar, trading just below 2.99 shekels. Oil prices hit $82.13 for WTI and $87.72 for Brent amid escalating tensions and declining U.S. strategic reserves. Gold prices approached a seven-week high, supported by technical momentum, Chinese central bank purchases, and anticipation of upcoming U.S. inflation data. Analysts expect cautious trading ahead of key CPI and PPI releases.

Looking ahead, U.S. consumer price index data due Wednesday is expected to show easing inflation pressures, with market forecasts indicating a lower probability of a "hot" inflation reading. This data will be critical for Federal Reserve policy decisions. Meanwhile, JPMorgan raised its year-end S&P 500 target to 8,000 points, citing strong Q2 earnings and solid investments in AI infrastructure by tech giants. Approximately 78% of S&P 500 companies have beaten earnings estimates, supporting a bullish outlook despite ongoing geopolitical and economic uncertainties.