Trading Week Ahead: Stocks Under Pressure and Tech Giants' Earnings
Tel Aviv closed the week in the green, led by defense stocks, while Wall Street ended in the red as the 'Magnificent Seven' faced a sell-off. This week, investors are focused on the Fed's interest rate decision and earnings reports from major global and Israeli companies.
The trading week opens ahead of one of the busiest weeks of the year: the Fed's interest rate decision and reports from some of the world's largest companies, alongside Israeli giants. But first, let's summarize what happened.
Friday was positive, closing a green week. The TA-35 rose 0.6% and the TA-125 climbed 0.4%. The stars were again the defense stocks, which jumped 3.5% — NextVision strengthened by about 6%, Elbit and Orbit by about 4% — against the backdrop of the ongoing escalation with Iran, which is fueling demand for stocks in the sector.
Nofar Energy actually fell nearly 6% after reporting advanced negotiations to acquire a stake in the Reindeer power plant for 855 million shekels — the market sometimes reacts cautiously to large acquisitions that require capital raising.
Dual-listed stocks return with a sharp negative impact of about 1.9% on the index, with the notable underperformer being Tower, which is expected to fall by 10% following a similar decline on Friday on Wall Street due to negative market sentiment. Nova is expected to fall by 6% and Camtek will plunge by 7.5%. Gilat and Ormat are also expected to stand out negatively with declines of about 10% and 6% respectively.
Wall Street concluded a negative week, led by a 2% drop in the Nasdaq. The negative peak was on Thursday, when the 'Magnificent Seven' wiped out nearly 800 billion dollars together — their worst day since April 2025. The reason: concerns over ballooning AI expenses, after Google and Tesla reported massive capital investments that are hurting cash flow.
An especially worrying sign: Intel plunged about 8% on Friday despite publishing excellent reports that beat all forecasts. When even a dream report cannot lift a stock, it shows that sentiment in the sector is fragile. SpaceX closed at an all-time low before another launch test.
In the background, a new round of global tariffs by Donald Trump has come into effect, affecting 99.4% of imports to the USA. On the other hand, oil prices actually fell on Friday (Brent below 96 dollars), but still recorded a weekly increase of about 11% after touching 100 dollars.
This week marks the peak of the reporting season, with two parallel fronts.
On Wall Street: Microsoft, Meta, and Apple — three of the 'Magnificent Seven' — will report and dictate the direction of technology as a whole. After Google and Tesla disappointed due to expenses, the bar is clear: investors want to see not only growth, but also a return on the massive investments in AI. According to Deutsche Bank, Meta enters the report from a strong position, with an advertising business approaching the upper end of forecasts.
This is also a big reporting week for Israeli companies on Wall Street. Lemonade, Check Point, Fiverr, and Teva — all will report. Teva, in particular, will be tested on the continuation of its efficiency plan and growth in innovative drugs, and Check Point on its ability to grow in the competitive cyber market.
Another central event: the Fed's interest rate decision later this week. No change is expected, but after expensive oil and high bond yields, the wording of Chairman Kevin Warsh will be carefully examined — especially regarding the question of whether an interest rate hike is still on the table this year. The market expects the interest rate to remain unchanged with a probability of about 65%, while the probability of an interest rate hike stands at about 35%.
This week requires special attention. For the Israeli saver, exposed to both Tel Aviv and Wall Street, this is a week that will largely dictate the direction for the coming months. Three critical points: the giants' reports (which will determine if the technology correction continues or is halted), the Fed's decision (which will affect the dollar and the bond market), and the escalation with Iran (which continues to fuel oil and defense stocks).
It is interesting to note the split in the local market: while global technology is bleeding, Israeli defense stocks are flourishing — exactly the opposite. This is a living example that the correlation between sectors is not taken for granted, and that sometimes, while one sector suffers, another thrives. The busy week will test everyone.
