Towards the Opening Bell: The Chip Giant Set to Move the Market

The trading day opens with eyes on the Tower reports, which will be published today — one of the most significant companies on the local stock exchange and a central event in the reporting season.

Tower arrives at the report after an especially turbulent period. On one hand, the stock has risen about 75% since the beginning of the year and has become one of the largest companies on the exchange. On the other hand, July was a difficult month for the entire chip sector, and the stock suffered sharp declines against the backdrop of negative global sentiment.

There are several key metrics to follow in the report:

The forward-looking forecast, which is often more critical than the numbers themselves.
Profit margins, specifically whether they are improving as new factories reach full capacity.
Exposure to AI, as investors look for growth driven by artificial intelligence demand, the hottest topic in the market right now.

It is important to remember: after such a sharp run, the bar is high. Even a good report will not necessarily boost the stock — the market will want to see continuity, just as we saw with the American giants and with Teva last week.

The stock exchange opened August with declines, despite gains on Wall Street. Yesterday, the TA-35 weakened by 0.9% and the TA-125 retreated by 1%. Construction led the declines (the index fell 2.7%, Aura 5.8%), and Cleantech and chips also fell — Nova 4%, Camtek and Next Vision about 4.7%. Teva weakened 4.1% in profit-taking after its surge. On the other hand, insurance stood out positively (the index rose 2.1%, Migdal 3.2%), and Elbit climbed 4.2%.

In New York, by contrast, August began with sharp gains. The Nasdaq jumped 2.1%, the S&P 500 rose 1.5%, and the Dow closed at a record high. The rally was led by the giants, following the strong reports of Amazon and Microsoft in recent weeks.

The de-escalation with Iran also provided support — Donald Trump canceled the attack in favor of negotiations on opening the Strait of Hormuz, and oil prices fell accordingly. The Purchasing Managers' Index (ISM) data surprised to the upside. The central event this week: the employment report on Friday.

Today's opening depends on two forces: the tailwind from the record on Wall Street and the geopolitical de-escalation on one hand, versus the wait for the Tower reports on the other.

For the Israeli investor, the Tower report is a reminder of how significant chips are on the local exchange — one company can move the entire index. But as always, a single report should not dictate long-term portfolio decisions.