Five things to know before the trading day

Trading review: current reports, trends, indices, stock prices, bonds, foreign exchange and commodities, and analyst recommendations.

1. Stock market

Trading on the Tel Aviv Stock Exchange is expected to open this morning against a backdrop of heavy pressure in the global technology sector, which is pulling leading stock exchanges into price declines. The weakness recorded last night on the New York stock exchanges spilled over this morning to the markets in Asia, which recorded sharp price declines led by local technology and chip giants, and it is expected to project directly onto technology and dual-listed stocks in Tel Aviv from the very opening of the trading day.

The heavy pressure in the technology sector overseas will also make its mark this morning on the local arena, when trading on the stock exchange is expected to open under negative influence from dual-listed stocks, which return from Wall Street with a negative weighted arbitrage gap of about 0.6% on the TA-35 index. At the head of the stocks that will concentrate negative interest and weigh on the leading indices are Tower, which returns with a negative arbitrage gap of about 4.6%, Palo Alto with a negative gap of about 2.5%, as well as Nova and Camtek which return with negative arbitrage gaps of about 2.3% and 1.8% respectively. On the other hand, a little tailwind will come from the direction of individual stocks like Opko Health (positive gap of about 4.4%) and Elbit Systems which will present a stable opening tending towards gains with a slight positive gap of about 0.4%. Also, Nice will open with a positive gap of about 3.2%.

In Asia, trading is conducted under negative pressure this morning, mainly led by the local technology and chip sector which follows the price declines recorded last night on Wall Street. The KOSPI index in South Korea leads the declines on the continent with a dive of about 4.3%, against the backdrop of a retreat of chip giants SK Hynix (6.7%) and Samsung (2.9%). In Japan, the Nikkei index is down by about 1.2%, as it is influenced by declines in leading technology stocks such as SoftBank (4.6%), Tokyo Electron (about 5%), and Kioxia (11%). The Hang Seng index in Hong Kong also shows weakness and retreats by about 1.8%. On the other hand, relative stability is recorded on the stock exchange in China, when the Shanghai index is traded almost without change with a slight tendency towards gains.

Futures on the indices are traded with slight price gains, after the Dow Jones index recorded an all-time high and a fifth consecutive day of gains; futures on it record gains of 0.2%, the S&P 500 index retreated and cut a streak of four days of gains this morning, futures on it record a slight gain of 0.1%. Futures on the Nasdaq index are traded with price declines of 0.2%.

Yesterday, the stock exchange in Tel Aviv closed in a negative trend, which strengthened towards the closing of trading. The TA-35 index fell by about 0.7%, while the TA-90 index weakened by about 0.5%. The declines came against the backdrop of the calm between the USA and Iran and the progress towards a deal to open the Strait of Hormuz. We will recall that the memorandum of understanding reached by the USA and Iran in mid-June was received poorly among investors in Tel Aviv, so that that month was the worst in terms of performance since October 2023. Weighing on the stock exchange were the Cleantech and TA-Oil and Gas indices, which fell by about 3.2% and about 2%, respectively - this, among other things, against the backdrop of the decline in oil prices to the area of 80 dollars per barrel and less than that, following hopes for an agreement between Iran and the USA. The banking and infrastructure indices also stood out negatively, with declines of about 1.6% and about 1.4%, respectively. The technology and insurance indices lost about 0.9% of their value. On the other hand, the defense index was the only one that finished the day in positive territory and strengthened by 1.5%, mainly thanks to the stock TAT Technologies, which jumped sharply following strong reports.

The star of the trading day yesterday was the stock El Al, which took off by about 15% after it published its financial results for the second quarter. This is the strongest day for the stock in about four years and one of its strongest days since it began trading on the stock exchange in Tel Aviv in 2003. The airline reported a jump in revenues for the second quarter of the year and these amounted to 986 million dollars, an increase of 27% relative to the parallel quarter last year. Bottom line, the company managed to record a net profit for shareholders of 125.9 million dollars, which constitutes a jump of 103% relative to the parallel quarter last year.

The stock of the Tel Aviv Stock Exchange (TASE) also concentrated interest and climbed after its financial results. The exchange's revenues in the second quarter jumped by 36% and amounted to 185 million shekels, an increase that stemmed mainly from an increase in activity - mainly from an increase in revenues from clearing services and revenues from trading and clearing commissions. On the other hand, the stock of the dual-listed software company Nice lost height, after it published its financial results for the second quarter. The company bypassed Wall Street's revenue forecasts in the second quarter and presented growth of 7.6% to 782.3 million dollars, above the analysts' expectation for revenues of about 767 million dollars. The growth was driven mainly by a jump of 12.6% in cloud revenues, which amounted to 609 million dollars, and an increase of 22% in activity in international markets. However, the company's revenue forecast (on a Non-GAAP basis) for the third quarter stood at 780-790 million dollars - slightly below the analysts' consensus, which stood at 795 million dollars.

The stock of the real estate company Avisror jumped by over 10% on its debut day on the stock exchange in Tel Aviv, although trading in it was conducted with volatility and at a low volume. The real estate company was forced to compromise on its value, when it completed an initial public offering (IPO) of its shares, according to a value of about 2 billion shekels (pre-money). This, after initially the company hoped to issue its shares according to a value of about 2.6 billion shekels.

Yesterday, Wall Street closed in a mixed trend, when the Dow Jones index presented excess performance and the index climbed by about 0.5%. On the other hand, the Nasdaq index was pressured by realizations in the technology sector and fell by 0.8%, while the S&P 500 index weakened slightly by 0.15%. In the commodities market, oil prices recorded yesterday price declines and retreated to a low of about four weeks against the backdrop of a certain calm in tensions with Iran, which led to heavy pressure on the energy sector on Wall Street. On the other hand, the precious and industrial metals market provided a prominent bright spot: copper futures recorded an exceptional jump to an all-time high, a positive signal for demand in the field of artificial intelligence, alongside a sharp jump in gold prices (an increase of almost 4% to about 4310 dollars per ounce) which led to sharp gains among gold mining stocks.

In trading in individual stocks, sharp movements were recorded yesterday against the backdrop of the reporting season. Among the prominent stocks that rose, the stock Disney jumped against the backdrop of mixed results that received an optimistic response from analysts in light of the durability of its businesses; Shopify jumped against the backdrop of a strong growth forecast for the third quarter; Amgen climbed to a 52-week high after it bypassed forecasts and raised the annual performance expectation; Eli Lilly strengthened following strong reports and continued demand for weight loss and diabetes drugs; Nvidia responded with a sharp rise to the rally in copper prices; and gold miners Freeport-McMoRan, Southern, Gold Fields, Newmont, and Barrick Mining recorded nice gains. In the defense and aviation sector, the stock Kratos stood out with a sharp rise, and in the finance and industry sector, Bank of America, Charles Schwab, and GE Aerospace recorded gains towards record levels. Among the prominent stocks that fell yesterday in trading, the stock SpaceX stood out, which recorded declines against the backdrop of a sharp jump in capital expenditures in its first reports since the IPO; Alphabet (Google) weakened following an announcement of reorganization in the AI divisions and the retirement of the chief scientist; AMD fell after the financial results and revenue forecast did not surprise investors positively; Insulet dived following a lowering of the annual growth forecast in the USA; and in the energy sector, the stocks EOG Resources, Diamondback Energy, and APA stood out with declines.

The season of financial reports for the second quarter of 2026 provided another reminder of the sharp volatility of Israeli stocks in New York. Trading presented a meeting of extremes yesterday, from crashes of about 25% due to disappointing forecasts and erosion in cash flow, to a meteoric jump of over 30% thanks to a transition to AI products and operational efficiency. SolarEdge erased gains of previous days following a disappointing revenue forecast for the third quarter (310-340 million dollars against an expectation of 371 million dollars), which weighed on the reduction of the net loss and on the increase in revenues. Taboola also fell, after it missed revenue forecasts, presented a weak expectation for the next quarter, and recorded a sharp erosion in free cash flow to 17.3 million dollars - a dynamic that received a negative tailwind from policy changes at Google and from the intentional disconnection of weak content sites, and this despite a transition to net profit. In sharp contrast to the negative trend, Kaltura provided the positive drama of the trading day with a jump (over 40% at the peak). The company presented an increase of 5% in revenues to 46.9 million dollars, an improvement in the gross profit rate, and a broad reduction in losses. The growth engine that swept the investors was the accelerated adoption of artificial intelligence solutions, when the company reported a record in signing new deals combining AI products (such as smart avatars), a figure that overcame fears of a slowdown in the future growth rate.

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2. Bond markets

In the government bond market, slight gains were recorded yesterday (Wednesday), which lowered yields slightly. The gains focused on long government bonds, linked and unlinked. Overseas, on the other hand, investors are mainly waiting for interest rate hikes. Despite slight declines in US bond yields in recent days, they are still traded at record levels.

Ofer Klein, head of the economics and research division at Harel Insurance and Finance, notes that although the week of interest rate decisions in the world's major central banks ended without changes in interest rates, "the non-change does not teach about neutrality, and in most cases, the assessment that it is a wait before an interest rate hike has even strengthened". Klein mentions the security fear of a renewed flare-up between Iran and the USA, which does not add optimism to the markets. According to him, "even if the truce returns in recent days, the uncertainty in oil and transport prices is expected to make the inflation reduction process difficult".

The US government bond market presents a mixed trend along the yield curve, as it is influenced by geopolitical developments and interest rate assessments. The 2-year yield rises by about 0.3% to a level of 4.19%, as it is directly influenced by market expectations for a possible interest rate hike in September. On the other hand, in the medium and long parts, a slight calm is recorded: the 10-year yield falls by about 0.1% to a level of 4.61%, and the 30-year yield weakens by a similar rate to a level of 5.16% - movements reflecting the attempts of investors to price in simultaneously the developments in the Middle East and the long-term inflation and growth scenarios.

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3. Commodity and currency markets

Oil prices retreat this morning when the Brent contract falls to 79.08 dollars per barrel and US oil (WTI) weakens to 74.69 dollars per barrel. The declines come against the backdrop of progress in mediation talks between Iran and Oman, which raise optimism among investors regarding a possible peace agreement between the USA and Iran that will lead to the reopening of the Strait of Hormuz. Yuki Takashima, an economist at Nomura Securities, explained the pressure on prices and noted: "Some selling pressure emerged following reports that talks between Iran and Oman are recording progress". However, the declines in price are moderated due to fears of continued Houthi attacks on oil tankers in the Red Sea and Gulf of Aden area, alongside US oil inventory data that presented supply issues with a surprising increase of 2.5 million barrels.

After the dollar weakened in recent days by about five agorot and fell to the environment of 3 shekels, this morning it is traded stably with a slight tendency towards gains of about 0.13% against the shekel, and moves around the level of 3.01 shekels. Ran Sinai, the chief economist of Ultra Finance, in his review notes that "the central factor behind the move is the decline in Israel's risk premium. The progress in contacts for an arrangement with Iran, alongside reports on a possible opening of the Strait of Hormuz, reduced regional tension and led to a sharp decline in oil prices. The result is a combination of a decline in the war premium that weighed on the shekel in recent months, together with the return of appetite for risk in global markets".

Gold prices record a sharp jump and climb to their highest level since the end of June, as they are supported by the weakening of the US dollar, a decline in bond yields, and a slowdown in employment data in the private sector in the USA. "Two days of decline in yields and a week of weakening in the dollar pave the way for gains in gold and silver", noted metals trader Tai Wong. The gains in the precious metal were recorded despite hawkish messages from senior Fed officials; Jeff Schmid, president of the Kansas City Fed, clarified that additional monetary tightening is required to curb high inflation, while Neel Kashkari, president of the Minneapolis Fed, emphasized that "this is the time to start a slow increase in the interest rate" - a move that raises the pricing in the markets for an interest rate hike in September.

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4. Macro

Ahead of the employment report to be published on Friday in the USA, the preliminary employment report of the company ADP published yesterday (Wednesday) provided a significant warning signal regarding the state of the US economy. According to the report, the private sector in the USA added in July only 44,000 jobs - the weakest figure since January, reflecting a deep miss of analysts' forecasts that expected an addition of 75,000 jobs. The disappointment of July joins the data of June, which were revised downwards to an addition of 95,000 jobs (compared to an initial report of 98,000). The negative trend is well reflected in the three-month average, which dropped to only 87,000 jobs compared to 107,000 in the previous month.

A deep analysis of the data reveals that the slowdown in employment growth is not limited to a certain sector, but encompasses all businesses in the US economy, regardless of their size. Small companies (up to 50 employees), which traditionally constitute a significant growth engine, added only 23,000 jobs - the weakest figure in this segment in half a year. The damage was well felt also in medium-sized companies that settled for a meager addition of 8,000 jobs, while giant corporations (over 500 employees) added 13,000 jobs, their weakest performance since March. The service supply sector recorded a prominent cooling with an addition of only 47,000 jobs - a drastic decrease compared to the 93,000 jobs added in June, and the sector's low point since March. While education and health services continued to lead with 36,000 new jobs, the leisure and hospitality industry, which was one of the prominent growth engines in recent years, recorded a loss of 11,000 jobs. The trade, transport, and infrastructure industries also lost 8,000 jobs. At the same time, the goods production sector crossed a red line and lost 3,000 jobs, in what constitutes the sector's first monthly decline since December 2025. While the construction and industry industries recorded a slight addition of jobs, the natural resources and mining industry pulled the entire sector downwards with a contraction of 6,000 jobs.

The most disturbing figure in the report, which may challenge the policymakers in the central bank (Federal Reserve), comes precisely from the direction of inflation. Despite the noticeable cooling in the pace of recruiting employees, wage pressures are in a trend of intensification. The annual wage growth rate for employees who changed workplaces jumped in July to 7.0%, the fastest pace recorded since August 2025. This jump, compared to the jump recorded in June - 6.8% and in May - 6.5%, signals a structural shortage and limited supply of employees in some parts of the labor market, which forces employers to offer significant financial temptations to attract talent (with an emphasis on the finance and industry sectors, where wage growth accelerated). On the other hand, wage growth for employees who remained in the same workplace remained frozen at 4.4% for the fourth consecutive month, which highlights the sharp incentive gap in the current US labor market.

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5. Forecast

The season of financial reports for the second quarter is emerging as one of the strongest in history, mainly thanks to the jump in investments in artificial intelligence. However, alongside the momentum in the markets, among analysts there are those who are beginning to fear downward forecast updates for next year. The economic background supporting the stock markets in the USA received in the second quarter an especially powerful tailwind. According to FactSet data, the S&P 500 index is now on the way to present growth of about 47% in profits in annual calculation - an exceptional jump compared to early forecasts that estimated growth of only about 20% before the opening of the reporting season. Such a dizzying growth rate is usually reserved for periods of recovery from severe crises or deep recession, as was done when exiting the corona pandemic in 2021 or from the financial crisis in 2010. Now, the main engine behind the current wave is the huge investments in the field of artificial intelligence, when most of the exceptional growth is led by technology giants Alphabet and Amazon. However, even without these two companies, the index presents double-digit growth of about 28% in profits - this is the seventh consecutive quarter.

"In my opinion - and I don't think that is even an exaggeration - this is probably the best earnings quarter I have seen in the 30 years that I have been active in the market", notes Mark Hackett, chief market strategist at Nationwide to CNBC. According to him, the jump in profits combined with the calm in oil prices and the removal of part of the geopolitical fears, force even the most suspicious investors to return to the market: "Anyone who sat on the fence must now jump inside with both legs. This is exactly the panic that grips investors when they are on the side and the markets run to new highs".

Alongside the optimism, in the market there also arise points for thought regarding the potential for continuity. Part of the jump in the profits of technology giants stemmed from one-time events, such as the revaluation of their holdings in companies like Anthropic and SpaceX - profits that are not necessarily expected to repeat themselves in the coming quarters. In addition, while forecasts for 2026 are undergoing upward updates, forecasts for 2027 are beginning to present an opposite trend. According to Sam Stovall, chief investment strategist at CFRA, growth forecasts for 2027 have already been updated downwards from a level of 18% to 13.5%. "The question that some investors are going to ask themselves now is whether the second quarter represented the peak of profits, and whether this is something that needs to be factored in already now in target price forecasts", warns Stovall. However, he concludes that in the immediate term the fundamental background is still strong and supports the continuation of the trend: "In the short term, the trend is the investor's best friend".