Five things to know ahead of the trading day

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

1. Stock market

The trading day in Tel Aviv is expected to open with a negative trend, influenced by negative arbitrage gaps from Wall Street and continued pressure on the chip sector. On the global background, Donald Trump announced massive tariffs on imports from Canada and ignited a full-scale trade war, while in the US bond market, concerns about the massive deficit in Washington are growing.

The arbitrage gap from Wall Street is expected to weigh on the opening of the trading day on the local stock exchange, as the weighted impact of dual-listed stocks will subtract about 1.1% from the TA-35 index with the first ticker. The negative pressure on the index is led by large chip and technology stocks, led by Tower, which returns with a negative arbitrage gap of 0.8%, Enlight Energy with a gap of 0.4%, and Elbit Systems with a negative gap of 0.15%, alongside deeper negative pressure on stocks like Allome, which returns with a gap of about 3.77%, and Gilat, which returns with a gap of about 0.5%. On the other hand, the partial support that will come from the positive gaps in Camtek with a positive gap of about 2.2% and Nova with a positive gap of about 1.1% will not be enough to offset the broad trend and prevent the opening of trading in red territory.

Asian stock exchanges are trading this morning in a mixed trend with a tendency to decline. The Nikkei index in Japan is rising moderately by 0.4%, while the KOSPI index in South Korea (-0.3%), the Hang Seng in Hong Kong (-0.2%), and Shanghai in China (-0.1%) are retreating downwards. Futures in New York are trading with slight gains. Futures on the Nasdaq index are leading with gains of 0.2%, alongside moderate gains in futures on the S&P 500 (by about 0.1%) and the Dow Jones (by about 0.05%).

Yesterday, the stock exchange closed the trading day with price declines. The TA-35 index fell by about 1.1%, while the TA-90 index lost about 1% of its value. The negative trend intensified towards the close, in light of the declines recorded on Wall Street, especially among the chip sector. The declines were led by the technology index, which fell by about 3.4%, mainly due to the decline in dual-listed chip stocks Nova, Tower, and Camtek. As mentioned, the declines come against the backdrop of negative sentiment towards chip stocks on Wall Street: the SOXX ETF, which tracks the broad chip sector, sends these stocks back to bear territory — that is, a decline of over 20% since the last peak.

After the technology index, the TA-Income Abroad and Defense indices stood out negatively, weakening by about 2.3% and 2%. The construction and cleantech indices both lost about 1.8%. On the other hand, the biomed index led the gains and climbed by 1.3%, mainly thanks to the surge in InterCure stock. The cannabis company announced that it had reached an agreement with the Tax Authority, according to which it will receive compensation of 230 million shekels. This is after its factory in Nir Oz was significantly damaged during the Iron Swords war, and then remained idle because it was used for IDF activity instead. Viridis led the gains in the TA-125 index and jumped by 7% without publishing any material report. Also standing out positively: the Tel Aviv Stock Exchange, Lahav, ICL, and Keystone.

Yesterday, the trading day on Wall Street closed with a mixed trend, while the split between core indices intensified. The Dow Jones index led the positive trend and recorded a slight gain of 0.2%. On the other hand, the continued pressure in the technology sector and chip stocks pulled the other leading indices into red territory: the S&P 500 index retreated by 0.25%, while the Nasdaq index recorded the most prominent decline among the indices, losing 0.5%. The negative trend in the broad indices was led by the technology sector, which weakened by 1.6%. Chip manufacturers and memory stocks concentrated heavy pressure: Nvidia stock fell on its way to a seventh negative day in a row, its longest streak since September 2022, ahead of the publication of its reports and against the backdrop of reports about the price increase of its AI server. At the same time, memory stocks suffered sharp realizations, including SanDisk, Seagate, Micron Technology, and Western Digital. On the other hand, investors showed a clear defensive tendency and fortified themselves in discount chains and basic consumption (such as Dollar Tree, Target, Healthcare REIT, Costco Wholesale, and Walmart), which boosted the basic consumption sector by about 1%. In the Dow Jones, Visa stock stood out with a gain of 3% to a 52-week high.

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2. Bond markets

A storm in the US government bond market - the attempt by the Ministry of Finance to calm the wave of declines through a buyback program evaporated within just one day. Despite reports that the ministry is considering financing the buybacks through its general account (TGA), long-term yields are breaking records - the 30-year yield remained around 5.23% (close to a 19-year high) and the 10-year yield hovered around 4.7%. The understanding is strengthening in the market that technical liquidity measures will not be able to sweep under the rug an unprecedented national debt of about 40 trillion dollars and a federal deficit that is scraping 1.8 trillion dollars.

The pressure does not stop on Wall Street; it seeps directly into interest rates on mortgages, loans, and credit cards of the general public, in parallel with the renewal of inflationary concerns against the backdrop of the surge in oil prices and the security escalation. The markets clarify that the Treasury's moves are merely a band-aid, and the growing pressure from investors exposes a deep lack of confidence in Washington's ability to deal with the spread of the deficit. Tracy Chen, a portfolio manager at Brandywine Global, does not hide her concern about the administration's conduct and tells MarketWatch that she is nervous because of "Bessent's failure to curb long-term yields. The market's behavior shows that bond traders still do not believe him".

The main concern is not liquidity in the short term, but the long-term fiscal path of the US. John Arnold, founder of Arnold Ventures, warns in MarketWatch against ignoring the hard numbers: "It is fair to say that at some stage, at some point, a crisis will occur. The big worry is that the lack of change in the fiscal picture will continue, until it ignites an explosion". Beyond the mountain of national debt, investors identify growing gaps between Treasury policy and Central Bank steps. Richard Ryle, Chief Investment Officer at Questar Capital Partners, emphasizes to CNBC the broad implications of the current economic environment: "The Treasury's intervention only intensifies the importance of the Jackson Hole conference. Interest rates are probably the most important factor in the economy right now, especially as huge investments in AI become more and more dependent on debt".

Dustin Reed, Chief Bond Strategist at Mackenzie Investments, sharpens the clash of versions between the authorities in MarketWatch and notes that "the Fed and the Ministry of Finance are sending contradictory messages: the Treasury is trying to solve a liquidity problem, while Fed Chair Kevin Warsh prefers that the market write the rules". In Israel, a mixed trend was recorded yesterday in the government bond market. The 10-year yield rose by 0.34% to a level of 3.866% and the 30-year yield climbed by 0.30% to 4.405%, while the yield for the 2-year bond remained unchanged at a level of 3.418%.

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3. Commodity and currency markets

In the local foreign currency market, the dollar records a slight gain of 0.13% against the shekel and trades around a level of 3.0055 shekels. Futures on Brent oil fell yesterday for the first time in more than a week, after the details of the "Economic Exile" operation against Iran, which was announced earlier today by Treasury Secretary Scott Bessent, seemed less severe than the threats that preceded them. Futures on Brent lost 2.22 dollars (2.4%), and closed at a price of 92.17 dollars per barrel. This is not only the sharpest daily decline since August 4, but also one that comes after a streak of gains of 8.4% during the six previous trading days. The closing price of futures on Brent is 28.8% higher than the level where they were just before the outbreak of the war between the US and Iran, but it is also 22.1% lower since it closed at the peak of 2026 at a level of 118.35 dollars per barrel, which it reached on March 31.

This morning, oil prices of both types are trading around base levels. The precious metals market maintains positive momentum, as the price of gold for immediate delivery climbed by 0.7% to a level of 4,635.39 dollars per ounce - its highest level since mid-May. The current rise comes following a surge of more than 5% last week, which was supported by the decline of the dollar following the US Treasury's announcement of the bond buyback program, alongside massive inflows of funds into gold-backed ETFs in the amount of 6.4 billion dollars - the highest in ten months. Jim Wyckoff, market analyst at American Gold Exchange, points out on CNBC the combination between fundamental data and technical analysis: "The fundamental and technical data are converging in a bullish direction for the gold market. As long as we do not see a signal for a technical reversal, the path of least resistance for gold will continue to be mixed to rising in the coming weeks".

The crypto market continues to concentrate great interest after Bitcoin climbs by almost 2% this morning and crosses the 80,000 dollar threshold, as it completes a surge of over 20% in just three days - the strongest three-day rally since 2023. The surge was driven by a wave of massive "short squeeze" that liquidated bearish positions in the amount of over 4 billion dollars, alongside institutional fund inflows of about 1.92 billion dollars into Spot ETFs. However, the sharp move pushed the momentum index (RSI) to a level of 81.8, which indicates extreme "overbought" conditions. Analyst Jonathan Krinsky from BTIG warns on CNBC that the current move resembles a historical pattern: "Bitcoin made an almost identical move in January 2023, when it surged by about 20% within three days and broke above the downtrend, but later the rally weakened and the price retreated towards the 200-day moving average".

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4. Macro

What started as feverish contacts ahead of a new trade agreement between Washington and Ottawa, turned within one weekend into a full-scale trade war between two of the closest trading partners in the world. After trade talks exploded on harsh tones, US President Donald Trump announced an increase in tariffs, while Canadian Prime Minister Mark Carney clarified that Canada had suffered an "attack" and would respond with force "dollar for dollar". The rapid escalation is already hitting waves in the markets, when the rally in commodities stopped, and the Canadian dollar records sharp declines against the world's leading currencies.

The immediate trigger for the flare-up was the imposition of 50% tariffs by the US on Canadian goods worth about 20 billion dollars. The American decrees cover a long line of products - from dairy products, wine, and wood, to furniture, cement, and hockey sticks. In response to the announcement, Trump did not stop there and announced that starting January 1, 2027, tariffs on imports of cars, trucks, and spare parts from Canada will be doubled to 50% (a level that already applies today to Canadian steel). Trump attacked sharply on the Truth Social network and declared that "Canada will no longer be treated as if it were a state in the US", while accusing Ottawa of exploiting American farmers for years.

The explosion of the talks left both sides in a sharp public confrontation, when each side accuses the other of unreasonable demands at the last minute. US Trade Representative Jamieson Greer claimed that Washington offered Canada the best market access in the world, including cutting tariffs on steel, aluminum, and vehicles, but the Canadians "simply wanted more" at the last minute. On the other hand, Canadian Prime Minister Mark Carney clarified that the US "asked for too much and offered too little", and emphasized that Canada will not compromise on its sovereignty or its core industries.

The decision to raise tariffs on the automotive sector to 50% threatens to directly shake the integrated supply chains of North America. Although the Canadian automotive market is relatively small (about 861 thousand vehicles produced in Canada were sold in the US in 2025, representing 5.4% of the American market), the assembly of cars and spare parts crosses the border several times during production. The move particularly hurts Japanese giants like Toyota and Honda, which hold 76.5% of the vehicle production volume in Canada, and deeply affects manufacturers from Michigan who rely on the free flow of components. Economists and strategists in the markets warn that Canada is much more vulnerable than the US to the escalation of the trade war. Although at the immediate macro level the direct impact on the Canadian GDP is defined as "modest", since the first wave of tariffs (at 50%) applies to a little more than 5% of all exports to the US (about 0.6% of the Canadian GDP), economists at ING and Capital Economics note that for small and medium-sized companies this is a hard blow. In the event that Washington expands the 50% tariffs to a fifth of Canadian commodity exports, the local GDP could shrink by 2% and push Canada into a deep recession, while risking tens of thousands of jobs.

Beyond the direct impact, economists warn that the explosion of the talks between Washington and Ottawa will hit deep beyond the budget items, when the real damage lies in the damage to business confidence. Carlos Capistran, Chief Economist of Bank of America for Latin America and Canada, explains that "the more significant channel is investor confidence - the renewal of uncertainty is expected to weigh on investments, and potentially also on hiring employees, even more than the tariffs themselves". At the same time, UBS warns that the worsening of relations casts a shadow over the renewal of the North American Free Trade Agreement (USMCA), which the US refrained from extending. Economist Abigail Watt from UBS noted in her review to clients that the bank's base scenario estimated that the talks would slide deep into 2027, and that "the return of tensions in the trade field makes the chance for a quick agreement lower". In addition, the sharpening of the tone from Ontario Premier Doug Ford, who even threatened to cut the supply of electricity and critical minerals to the US (and was dubbed a "bully" by Trump), raises the level of anxiety in the markets. Canada's ability to diversify its export markets beyond the neighbor to the south is almost completely limited in the short term, which leaves the "loonie" under heavy pressure. The global economy is now watching with bated breath for September 8, the date when the Canadian retaliatory tariffs come into effect, to see if the two partners will find a ladder to climb down from, or will slide into a path of head-on collision.

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5. Forecast

The dramatic surge in Moderna stock, which jumped by 177% in one day and led to massive losses of about 5.5 billion dollars for short sellers, reopened market pricing for the entire biotech industry. While the fluctuation around Moderna was driven in part by an aggressive "short squeeze", the success in the phase 3 trial for the personalized mRNA vaccine combined with Merck's "Keytruda" drug gives a strong fundamental tailwind to its partners and the sector's giants.

A comprehensive analysis by analysts Josh Brown and Sean Russo from Ritholtz Wealth Management for CNBC shows that the rally in the sector is not accidental, but is clearly expressed in two of the leading stocks in the field. For Merck, the report on the successful trial provided an explosive technical breakout supported by a fundamental narrative change. While Moderna concentrated the sharpest surge, Merck responded with a breakout gap from the 137 dollar level straight to an all-time high at 152.20 dollars. Analyst Sean Russo notes that the results give analytical validity to the company's future drugs. "The combined drug achieved the main goal of survival without proof of disease recurrence, and thus gave confirmation to a new therapeutic approach built on its core drug. This is a beautiful example that what is good for patients is also good for investors", explains Russo.

From the technical angle, analyst Josh Brown emphasizes that this is a powerful structure that has been forming for months. "When such a trigger meets a chart that is already ready with a year-long base, institutional entities act fast and do not wait for a price pullback". Brown marks for traders the 145 dollar level, the upper part of the gap, as the critical support level. According to him, as long as the stock closes above this price, the positive thesis remains in effect. For longer-term investors, the 50-day average rising to 128 dollars serves as the fiscal support floor.

At the same time, Amgen presents a model of systematic growth and impressive business breadth. Unlike the sharp fluctuation of Merck and Moderna following a single clinical event, Amgen climbs in a gradual and consistent path from the beginning of the year, as it breaks new records and is backed by strong quarterly results - including revenue of 10.1 billion dollars and an increase in the annual forecast. Russo sharpens the difference between a diversified business and companies relying on a single product. "Amgen presents growth throughout its divisions, when six growth engines that constitute about 70% of sales, grew by 26%. This is exactly what distinguishes between a stable business and the risk of a pharma company with a single engine". Brown for his part identifies in Amgen's chart a gradual and quiet purchase. "Amgen's stock chart was one of the most stable charts in the market all year, and after the company established support above the 200-day average in the spring, it took off to new highs". On the technical level, he marks the 390-400 dollar area as a new price floor, while the 200-day average at 353 dollars constitutes the lower defense line for investors.

The success of the joint trial opened the dam for the entire biotech sector, as reflected in the surge of the XBI index by more than 34% since the beginning of the year. Brown and Russo's forecast shows that Merck and Amgen set strong expectations for the future - whether it is an explosive breakout based on a clinical trial, or building a gradual momentum supported by broad financial performance.