{"id":506119,"date":"2026-06-22T22:03:18","date_gmt":"2026-06-22T22:03:18","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/506119\/"},"modified":"2026-06-22T22:03:18","modified_gmt":"2026-06-22T22:03:18","slug":"investors-sour-on-israel-as-us-moves-to-end-fighting-blunting-markets-wartime-gains","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/506119\/","title":{"rendered":"Investors sour on Israel as US moves to end fighting, blunting market’s wartime gains"},"content":{"rendered":"

For months, barrages of Iranian ballistic missiles flying at Israel, escalating tension at the Lebanese front and fears of a widening conflict did little to derail investor confidence in the Israeli financial market, pushing local stock indices to record highs<\/a>.<\/p>\n

That changed last week.<\/p>\n

Around the globe, equity markets rallied<\/a> while oil prices tumbled, fueled by optimism that a new US-Iran deal would end the war and reopen the crucial Strait of Hormuz to commercial traffic, taking pressure off energy supplies and reducing economic and geopolitical uncertainty.<\/p>\n

But in Israel, which launched the war with the US on February 28, local markets had the opposite reaction, falling sharply amid a mass sell-off. The gap between the underperformance of the local stock market and the US market was the widest since March 2025, according to IBI Investment House.<\/p>\n

\u201cWhen rockets were flying in the heat of things, the local stock market was overly optimistic that the geopolitical risk in the long term would be lower, meaning the risk from Iran, and from Hezbollah in the north,\u201d Leader Capital Markets chief economist Jonathan Katz told The Times of Israel. \u201cThere is disappointment in the market that the emerging new deal hasn\u2019t shifted the paradigm at all, and there is concern that Iran is now rebuilding and will get money from the reopening of the Hormuz, which means possible further conflicts down the road, and a renewal of the nuclear threat.\u201d<\/p>\n

\n\t\t\tSign up for the Tech Israel Daily
\n\t\t\tand never miss Israel’s top tech stories\n\t\t<\/p>\n

\t\t\t\tBy signing up, you agree to the terms<\/a><\/p>\n

\u201cCertainly, the ballistic missile threat never went away,\u201d Katz said.<\/p>\n

The emerging US-Iran deal is sending fears down the local market that the cards are flipping, with Tehran winning influence over both Washington and the regional agenda, after two and a half years of Israel steadily weakening Iran and its proxies.<\/p>\n

Israeli officials are bitterly opposed<\/a> to the deal\u2019s terms, which they criticize for resolving none of the war\u2019s key goals \u2014 notably, eliminating Iran\u2019s nuclear and ballistic missile programs, and creating the conditions for the fall of the regime.<\/p>\n

The memorandum of understanding between the US and Iran also constrains Israeli action against Hezbollah in Lebanon, a fiat that Jerusalem has vowed to defy.<\/p>\n

To many in Israel, the rhetoric coming out of Washington, Israel\u2019s most important long-time ally, has been strikingly unsympathetic to the country\u2019s concerns, placing them below a desire to get the global economy back on track.<\/p>\n

\t\"\"<\/a>
\n\t\tJonathan Katz, chief economist at Leader Capital Markets. (Aya Ben Izri)<\/p>\n

\u201cThere is a sentiment that Israel\u2019s hands are tied amid pressure from the US and a slight falling out of a relationship with President Trump, our strongest ally, so this realization that the war didn\u2019t change Israel\u2019s long-term geopolitical risk element is what causes a partial reversal, because the Israeli stock is still up year to date rather nicely,\u201d Katz remarked.<\/p>\n

The Tel Aviv Stock Exchange\u2019s TA-125 index dropped 4.9% last week and is down almost 8% so far this month. The benchmark index is still up 11.4% from the start of the year, a rise that was driven by optimism for an end to hostilities in the region and an improved geopolitical environment.<\/p>\n

The TA-35 index of blue-chip companies slipped 4.6% last week, trimming its gain since the start of the year to 14%. The TA-90 index, which tracks the shares with the highest capitalization not included in the TA-35 index, fell 5.9% and is up a mere 1.9% this year. On Monday, the TA-35 declined 0.4%, and the TA-90 sank 2%.<\/p>\n

\u201cThe overconfidence during the war was exaggerated, and what looks to be the gloom and doom of the past week seems also to be exaggerated,\u201d Katz said.<\/p>\n

During the same period, in the US, the S&P 500 index rose 0.9%, and the Nasdaq composite jumped 2.4%.<\/p>\n

\t\"\"<\/a>
\n\t\tTrader Edward Curran works on the floor of the New York Stock Exchange, June 16, 2026. (AP\/Richard Drew)<\/p>\n

\u201cThis is a wake-up call that the geopolitical reality is less optimistic,\u201d said IBI Investment House chief economist Rafi Gozlan. \u201cThe positive momentum in the local market has deflated.\u201d<\/p>\n

Despite being embroiled in the longest and most intense fighting period in its history, Israel\u2019s main stock indexes have broken through multiple record highs over the last two years, quickly recovering from an initial steep plunge at the outbreak of war with the Hamas terror group in October 2023.<\/p>\n

In 2024, which saw intense fighting in Gaza and Lebanon, as well as the first-ever direct Iranian attack on Israel, the TASE was the world\u2019s fastest-rising stock market.<\/p>\n

\t\"\"<\/a>
\n\t\tA view of the Tel Aviv Stock Exchange on October 8, 2025. (Avshalom Sassoni\/FLASH90)<\/p>\n

Until this week, stocks had continued to soar as investors placed big bets that Israel\u2019s US-backed military achievements against Iran\u2019s nuclear program \u2014 alongside the already weakened Iranian proxies in Lebanon, Syria, and Gaza \u2014 would be a game-changer and reduce risks to Israel\u2019s security and economy.<\/p>\n

For decades, the Iranian threat was a cloud looming over Israel\u2019s economic horizon, cited as a major geopolitical threat by local and global investor reports, international credit rating agencies, and country forecasts.<\/p>\n

Gozlan said the US-Israel war with Iran and fighting on multiple fronts had also stirred investor hopes for a reshaped Middle East and potentially a new era of economic peace and prosperity in the region, opening the door to long-sought opportunities with Israel\u2019s neighbors.<\/p>\n

\t\"\"<\/a>
\n\t\tIBI Investment House chief economist Rafi Gozlan. (Courtesy)<\/p>\n

\u201cThe local market priced in overly optimistic scenarios, and although generally, markets are forward-looking, here, there was a late market response to the realistic developments on the ground,\u201d said Gozlan.<\/p>\n

The prospect of an improved regional security landscape alongside Israel\u2019s military successes also buoyed investor optimism to buy the shekel.<\/p>\n

The local currency, which recently reached<\/a> a 33-year peak against the dollar, weakened by about 0.75% last week. Since the start of June, the shekel has lost 5.2% of its value against the dollar, but it was still up 7.3% so far this year, as of Friday.<\/p>\n

\u201cAfter overexuberance and now what seems to be overpessimism, there are a lot of ifs when looking ahead,\u201d said Katz. \u201cIf current deal negotiations advance and the US-Iran agreement holds, and if in Lebanon there is total quiet, and globally it is calmer if the Strait of Hormuz remains open, the markets have room to correct as they were fluctuating in both directions.\u201d<\/p>\n


\n\t\t\t\tWe can’t do this work alone.\t\t\t<\/p>\n

\t\t\t\t\t\t\t\t\t\"\"\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/p>\n

The war with Iran has been draining for all of us in Israel. But when I heard about a high casualty incident \u2013 ballistic missile impacts in Arad and Dimona that left nearly 200 people wounded \u2013 I drank a cup of coffee, packed a bag, and headed south.<\/p>\n

There, I spoke with Shilgit, the head of an after-school program for underprivileged youth. Standing outside her destroyed center, Shilgit said it was a miracle that no children were hurt and spoke about the community coming together in the hours since.<\/p>\n

As a Times of Israel reporter, I\u2019m committed to telling stories of resilience like Shilgit\u2019s. But my colleagues and I can’t do this alone. If you value work like this, please consider joining our reader support group, The Times of Israel Community. Your financial support is essential to keep real human reporting like this going.<\/p>\n

\u2014 Stav Levaton, military reporter<\/p>\n

\t\t\t
\n\t\t\t\tYes, I’ll join\t\t\t<\/a><\/p>\n

\t\t\t
\n\t\t\t\tYes, I’ll join\t\t\t<\/a><\/p>\n

\t\t\tAlready a member? Sign in to stop seeing this<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"For months, barrages of Iranian ballistic missiles flying at Israel, escalating tension at the Lebanese front and fears…\n","protected":false},"author":2,"featured_media":506120,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[190507,42,2648,43,194474,232625,40,38,41,39,207495],"class_list":["post-506119","post","type-post","status-publish","format-standard","has-post-thumbnail","category-headlines","tag-2026-us-israel-war-with-iran","tag-headlines","tag-israel-economy","tag-news","tag-shekel-dollar-exchange-rate","tag-tel-aviv-stock-exchange-tase","tag-top-news","tag-top-stories","tag-topnews","tag-topstories","tag-us-iran-relations"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/506119","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=506119"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/506119\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/506120"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=506119"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=506119"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=506119"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}