Tel Aviv Investors Brace for Volatile Week Amid Security Tensions and Global Market Swifts

As the Tel Aviv Stock Exchange opens this week, investors remain cautious amid rising regional security tensions involving Gaza, Lebanon, and Syria. Last week, the Tel Aviv 35 index fell by about 0.7%, while the insurance and oil & gas sectors saw gains of approximately 5% and 3.5% respectively, driven by rising oil prices. Technology stocks declined by around 4.2%. Globally, Asian markets are mostly down, with significant drops in South Korea and Hong Kong, where Alibaba shares fell 8% following a large discounted fundraising. In the US, Wall Street indices paused after a strong earnings season, with the S&P 500 and Nasdaq ending a three-week winning streak amid rising long-term bond yields.

The US bond market is under pressure as 30-year Treasury yields reached 5.28%, near decade highs, fueled by high government debt exceeding $40 trillion and increased corporate bond issuance for AI investments. Treasury Secretary Janet Yellen announced plans to intensify deficit reduction efforts, but market concerns persist. Analysts note that Treasury bond purchases only shift debt maturity profiles without reducing overall borrowing needs.

Commodity markets show Brent crude oil prices around $93 per barrel, down about 1% amid expectations of a US economic lockdown on Iran. The Israeli shekel remains steady against the dollar at 2.987. The US dollar index is near its lowest since May, weakened by coordinated interventions supporting the Japanese yen. Bitcoin surged over 20% last week, boosted by Treasury bond purchase announcements and positive regulatory signals from former President Trump.

This week’s economic focus centers on the US core PCE inflation report for July, expected to show a slight slowdown to 3.6% annual inflation. Market participants will closely watch Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole symposium for clues on future interest rate policy amid high bond yields.

Analysts remain optimistic about select stocks with strong AI exposure. CrowdStrike is expected to report strong Q2 results, with a price target raised to $245. Dell’s shares have surged 251% this year due to AI server demand, with a new target of $550. SanDisk also received a buy rating, with forecasts of rapid growth in NAND memory driven by AI applications. These companies are seen as well positioned to benefit from structural shifts in technology demand.