Tel Aviv Stock Exchange Opens Higher Amid Regional Tensions and US-Iran Stalemate

The Tel Aviv Stock Exchange (TASE) opened with optimism on the morning following a strong market close, despite ongoing regional uncertainties and stalled US-Iran negotiations. Asian markets showed mixed trends, with South Korea's Kospi rising about 2%, Japan's Nikkei up 0.4%, while Hong Kong's Hang Seng and Shanghai indices declined. US futures indicated stability, with slight gains in Dow Jones and S&P 500 contracts and a minor drop in Nasdaq futures. Oil prices remained steady amid US threats of an indefinite maritime blockade on Iran, balancing geopolitical risks against global demand concerns. Inflation data expected at market close could further influence optimism if it falls below Bank of Israel's 1%-3% target, potentially supporting a September rate cut. Dual-listed stocks showed mixed gaps, with Tower Semiconductor down 4% and NICE up similarly. Yesterday, TASE closed higher, led by gains in biotech, communications, construction, and oil and gas sectors. Notable movers included Tadiran and Alpha Tau, which surged on quarterly reports, and NewMed Energy, which announced pipeline completion expected to boost exports. Discount Bank shares rose following a strong quarterly profit, while Isracard declined despite revenue growth.

In the US, the S&P 500 reached a new high, supported by falling oil prices and moderate inflation data, with the Nasdaq also up, led by Meta, Micron, and Netflix. The Russell 2000 index hit a record, continuing its strong 2026 performance. Oil prices dropped about 2% due to demand concerns and US-Iran tensions. US producer price index data showed no change in July, reinforcing expectations that the Federal Reserve will delay interest rate hikes. Netflix shares rose after Bill Ackman's Pershing Square fund disclosed a renewed investment, while Super Micro Computer's stock jumped 19% following strong earnings guidance. Cisco shares fell slightly due to a modestly weaker gross margin forecast, and Intel gained after Bank of America maintained a buy rating, citing its $20 billion capital raise to expand chip manufacturing. Israeli companies Wix, Monday.com, Playtika, and ZIM saw gains, while SimilarWeb dropped 30% post-earnings. Palo Alto Networks rose 2%, nearing a $320 billion market cap.

In bonds, TASE government bond yields declined slightly across maturities, maintaining a steep curve with a 97 basis point gap between two- and 30-year bonds. Conversely, US 30-year yields rose to levels unseen since 2007, driven by concerns over the US deficit, corporate bond supply, and reduced foreign demand. Analysts warn that rising yields could pressure economic growth and equity markets.

Currency and commodities saw oil prices edge up following US blockade threats on Iran, reversing previous declines amid demand worries. Brent crude rose to $87.16 per barrel, WTI to $81.41. The US dollar strengthened slightly against the Israeli shekel to 2.965, though it recorded a weekly decline. Market experts note the shekel remains sensitive to regional developments, especially around the Strait of Hormuz. Gold prices retreated after reaching two-month highs on moderate US inflation data, with analysts suggesting potential for significant gains if key resistance levels are surpassed.

Macro focus centers on July's consumer price index (CPI) data from Israel's Central Bureau of Statistics, expected to show a 0.2%-0.3% rise and annual inflation dropping to 1.4%, near the lower bound of Bank of Israel's target. Economists caution that factors like rising oil prices and supply-side pressures complicate forecasts and monetary policy decisions. Business inflation expectations hit their lowest since 2022, supporting a continued easing trend.

In corporate news, cloud infrastructure company Nebius Group's stock has surged 210% in 2026 amid the AI boom. Despite pre-market dips after earnings, Bank of America raised its price target to $310, citing strong second-quarter results and robust AI-tailored cloud infrastructure. Nebius reported adjusted EBITDA of $236.2 million and revenues of $582.3 million, surpassing analyst estimates. The company reaffirmed its annual guidance and plans to expand data center capacity significantly by year-end. Analysts highlight Nebius's competitive advantages and growth prospects, with most recommending buy or strong buy ratings. Meanwhile, Israeli firms are eyeing the German CBD market ahead of potential IPOs.