Five Key Things to Know Ahead of the Market Opening
As trading desks prepare for the opening bell, here are the five essentials to keep in mind for the stock market opening. The week features a light schedule in Tel Aviv due to holidays, mixed signals from global markets, and the looming Bank of Israel decision that could set the tone for local equities, bonds, and currencies.
1) Stocks: Recent tone and near‑term outlook
Last week in Tel Aviv saw only two trading sessions because of the Rosh Hashana break. Across those sessions, major indices, TA‑35 and TA‑125, closed almost flat, ending the week where they started. The rally on Thursday was led by dual‑listed names that gained in line with U.S. markets, while the sector breakdown showed a strong swing in insurance, with the TA‑Insurance index jumping about 2.7% on the day and marking a year‑to‑date gain nearing 90%. The local banking index also posted a solid move, up roughly 2%.
Despite the upbeat mood in selected names abroad, the opening for arbitrage shares traded both in the U.S. and Tel Aviv is not expected to tilt the main indices materially. Specific stock moves anticipated for the day include Teva and NICE trading lower by a few percentage points, with Elbit rising modestly and Ormat gaining around 2%. Tech and software names such as Camtek and Formula Systems are seen moving lower, in line with global risk sentiment. Investors should also note that a shortened trading week is on the horizon, capped by the Yom Kippur holiday.
Looking ahead, the market focus shifts to the Bank of Israel’s interest‑rate decision due on Day 2. The market is pricing in roughly a 15% chance of a rate cut this month and around 80% odds of a cut in November, with traders awaiting the central bank’s guidance on the path of monetary policy and the quarterly economic‑research outlook contained in its post‑decision release.
2) Bonds: Local and global yield dynamics
In the local debt market, corporate bond indices posted a positive week, rising about 0.7%, while the government bond index saw very modest gains. Analysts from Bank Hapoalim advise maintaining a balanced, medium‑duration bond portfolio while taking advantage of the generally low inflation expectations along the yield curve, including a tilt toward linked notes over nominal shekel‑denominated instruments when appropriate.
On the U.S. front, Treasuries showed slight volatility after the latest price data from the PCE, the Fed’s preferred inflation gauge. The 10‑year yield ticked up about a basis point to around 4.18%, while the 2‑year yield declined marginally, suggesting a mild flattening of the curve as investors reassess the trajectory of U.S. policy.
3) Commodities and currencies: currency moves and energy
In the foreign exchange market, the shekel slipped about 0.2% against the dollar on the latest session, with the dollar near 3.34 shekels. Since September, the greenback has edged higher by roughly 0.3% versus the shekel, while the euro has gained about 0.8% over the same period; year‑to‑date, the trend has been mixed, with the dollar weaker against the shekel and the euro modestly stronger than at the start of 2025.
Oil continued its modest rally, lifted by attacks on energy infrastructure that disrupted Russian exports. WTI hovered around $65.7 a barrel and Brent near $70.1. In the crypto sector, Bitcoin traded around the $109,000 level amid ongoing volatility in risk assets.
4) Macro: central banks, data, and geopolitics
Tomorrow at 16:00, the Bank of Israel is expected to announce its policy decision. Markets have largely priced in a hold given the domestic uncertainty from the prolonged Gaza conflict and the broader global backdrop. Analysts widely expect that the rate will remain unchanged this cycle, with a clearer signal on the future path of policy likely to come from the governor’s commentary and the quarterly Economic Research Division projections.
Globally, the U.S. PCE price index rose 2.9% year over year in August, keeping the Fed on track for potential easing later in the year. Strategists noted a cautiously optimistic path for easing, with some foreseeing cuts this year, while others warned that inflation persistence—especially in services—could delay a near‑term adjustment. The dispersion in views underscores the sensitivity of markets to policy signals amid geopolitical uncertainty.
5) Outlook: AI demand, memory chips, and target prices
In the near term, Micron Technology has drawn attention after a year of strong performance. The stock is now facing a pullback following earnings, but analysts have raised price targets in response to AI‑driven demand for memory. Bank of America increased its target from $140 to $180, maintaining a Neutral rating due to concerns about competition in the HBMs segment and capex intensity. Cantor Fitzgerald, meanwhile, remains more constructive, lifting its target to $200 and endorsing an Outperform rating on the basis of improved gross margins and a favorable product mix.
Overall, the week ahead may offer a mixed bag: supportive signals from selective domestic equities and a cautious stance from central banks amid geopolitical risks. For investors, the key is to balance exposure across equities, bonds, and currency strategies while watching the Bank of Israel’s commentary for any hints on the domestic growth path and inflation trajectory.
