Tel Aviv Market Set to Open Lower Amid Global Trade Tensions and Tech Sector Pressure
The Tel Aviv stock market is expected to open lower, influenced by negative arbitrage gaps from Wall Street and ongoing pressure on the semiconductor sector. Key dual-listed tech stocks such as Tower Semiconductor, Enlight Energy, and Elbit Systems are leading the decline, with Tower opening 0.8% lower. Despite some positive gaps in companies like Camtek and Nova, the overall trend points to a red opening. Asian markets show mixed performance, with Japan's Nikkei rising modestly while South Korea, Hong Kong, and Shanghai indices fall. U.S. futures indicate slight gains, led by the Nasdaq.
Yesterday, the Tel Aviv 35 index dropped about 1.1%, with the tech sector falling sharply due to semiconductor stock declines. The biotech index was an exception, rising 1.3%, led by InterCure, which announced a 230 million shekel compensation agreement with the Israeli Tax Authority following damage to its Nir Oz facility during recent conflicts. Meanwhile, the cryptocurrency market is rallying, with Bitcoin surging over 20% in three days amid massive short squeezes and institutional inflows.
In U.S. bond markets, Treasury yields continue to climb despite the Treasury Department's short-lived bond buyback plan, with 30-year yields near 5.23%, the highest in 19 years. Investors remain concerned about the massive national debt nearing $40 trillion and a federal deficit approaching $1.8 trillion. Experts warn of a potential fiscal crisis if no long-term solutions are found.
Trade tensions escalated sharply as U.S. President Donald Trump announced hefty tariffs on Canadian imports, including a 50% tariff on $20 billion worth of goods and plans to double tariffs on Canadian vehicles by 2027. Canada vowed a strong response, with Prime Minister Mark Carney calling the move an "attack." The dispute threatens North American supply chains, particularly in the automotive sector, and raises fears of a deep Canadian recession if tariffs expand further.
In biotech, Moderna's stock soared 177% in one day following successful phase 3 trial results for a personalized mRNA vaccine combined with Merck's Keytruda drug. This breakthrough has boosted the entire sector, with Merck and Amgen also showing strong gains. Analysts highlight the technical and fundamental strength behind these moves, signaling continued positive momentum for leading biotech firms.
Overall, markets are navigating a complex mix of geopolitical tensions, fiscal concerns, and sector-specific developments as investors weigh risks and opportunities ahead.
