Israeli markets closed on Tuesday, December 2, with a powerful and broad-based rally across the equity landscape. Investors entered the month with renewed optimism, pushing major stock indices sharply higher following encouraging global economic signals and improving risk sentiment. While equities surged, the bond market displayed pockets of weakness as capital rotated toward growth-oriented asset classes.

TA-35 Leads the Rally with Exceptional Market Breadth

The TA-35 index soared 1.91% to 3,495.10 points, reflecting decisive bullish momentum among Israel’s largest companies. Notably, 32 of the 35 index constituents advanced, while only three declined, signaling one of the strongest breadth readings in recent months. This widespread participation suggests investors are increasingly confident in the stability of Israel’s blue-chip corporations amid a shifting global macro landscape. Sectors such as technology, banking, and industrials showed pronounced strength, underscoring a preference for companies with solid earnings prospects and global exposure. The sharp upward movement may also reflect growing expectations of interest-rate easing abroad, alongside easing geopolitical tensions that had previously weighed on sentiment. Overall, the TA-35’s performance indicates a clear resurgence of institutional buying and renewed appetite for large-cap risk.

Mid-Caps and Bank Shares Strengthen as Broader Sentiment Improves

The TA-90 rose 1.22% to 3,704.01 points, supported by 63 advancing stocks versus 24 decliners. Mid-caps, which typically respond quickly to improvements in domestic confidence, benefited from increased trading activity and positive sentiment across consumer, tech, and industrial segments. The TA-90 & Banks index gained 1.27%, reflecting continued strength in financial stocks. Banks have been supported by resilient credit markets and expectations of stable loan demand heading into the final weeks of the year. Their performance also aligns with global financial sector trends, where easing long-term yields have begun to support valuations. The broader TA-125 index climbed 1.75%, with an impressive 95 advancers compared to 27 decliners. This reinforces the conclusion that today’s gains were not limited to a handful of heavyweights but spread across most sectors and market-cap tiers. The TA-125 Value Index rose 1.29%, indicating that value-oriented names participated meaningfully in the rally alongside growth stocks.

Bond Market Weakens as Investors Rotate Toward Equities

In contrast to the strong equity session, the bond market ended the day mixed to negative. The Short-Term Bond Index rose slightly by 0.02%, reflecting consistent demand for near-duration securities typically favored by defensive investors. However, broader segments of the fixed-income market experienced declines. The All-Bond General Index fell 0.14%, with 334 declining securities overshadowing 191 advancers. This suggests a measured shift away from longer-duration or yield-sensitive instruments as investors reposition in favor of equities. Inflation-linked bonds also weakened: Tel-Bond Linked A decreased by 0.07%, while Tel-Bond 60 Linked declined more sharply at 0.25%. These moves may indicate moderating inflation expectations or profit-taking after previous periods of strength. Despite the declines, bond market liquidity remained healthy, signaling active participation rather than a broader withdrawal.

Looking ahead, today’s strong rally positions Israeli equities for potentially continued upside, but several factors will shape the next phase of market direction. Investors will be monitoring global central-bank commentary, inflation data releases, and geopolitical developments for signs of sustained risk appetite. Opportunities may emerge in sectors that have lagged the current upswing, while risks include abrupt sentiment shifts tied to macroeconomic surprises or volatility in global markets. As December progresses, watching market breadth, cross-asset flows, and corporate guidance will be crucial for identifying whether today’s momentum can develop into a longer-term trend.