Markets Face a Packed Week of War, Inflation, and Central Bank Decisions

Markets in Israel and abroad enter a shortened and highly sensitive trading week shaped by security tensions, diplomacy, and major macro data. Investors are watching fighting in the north, including an Israeli strike in Beirut’s Dahiyeh after three barrages from Hezbollah at the Galilee, which prompted Iranian threats to “punish Israel.” At the same time, sentiment is being supported by reports that the United States and Iran are close to an interim deal, despite Donald Trump saying over the weekend a signing could happen as early as today and Iran denying it. U.S. trading will also be shortened because markets are closed Friday for Juneteenth, while exchanges in China and Hong Kong are shut for a local holiday.

In Israel, attention will split between security escalation and two key data releases. CPI for May is due Monday, and quarterly GDP, annualized, follows Tuesday. Together with the shekel’s modest weakening against the dollar, these figures could influence Bank of Israel rate policy. On the corporate calendar, Mivtach Shamir, which fell about 5% last week, will report first-quarter 2026 results on Tuesday. Globally, central bank decisions dominate the week, with the Federal Reserve due Wednesday evening, followed by rate calls in Britain and Japan.

Last week ended positively on the Tel Aviv Stock Exchange. The TA-35 rose 1.8%, the TA-125 gained 1.4%, and the TA-Bankim 5 index added 1.7%. The TA-Security index climbed 1.9%, while green energy and real estate lagged. In New York, the Dow Jones rose 0.8% and the S&P 500 gained 0.3%, while the Nasdaq closed slightly lower.

Chip and dual-listed shares are set to open higher in Tel Aviv after returning from New York with positive arbitrage gaps. Camtek leads with 3.2%, followed by Nice at 2.6%, Nova at 2.2%, and Tower at about 0.5%. Ormat and ICL also have positive gaps of about 1.4%. Elbit Systems is the main drag, with a 3.1% negative gap, alongside Teva at 0.5% and Gilat at 3.7%.