Israeli financial markets closed today, February 25, 2026, with another session of declines, though losses were more moderate compared to the sharp drop seen yesterday. Investors continued to trim exposure, particularly in mid-cap and banking stocks, while bond markets offered only partial support.

Equities Extend Pullback as Breadth Stays Weak

The Tel Aviv-35 index slipped 0.15 percent, reflecting relative resilience among large-cap stocks. While the decline was modest, advancing stocks remained outnumbered by decliners, signaling lingering caution in the blue-chip segment.

Mid-cap shares once again bore the brunt of selling pressure. The Tel Aviv-90 index fell 0.73 percent, extending its recent downturn. The combined Tel Aviv 90 and banking index declined 0.82 percent, highlighting sustained weakness in financial and growth-sensitive stocks.

The broader Tel Aviv-125 index lost 0.32 percent, underscoring the continued broad-based nature of the pullback. Declining stocks significantly outnumbered advancers, reinforcing the negative breadth that has characterized the past two sessions. Equity turnover reached approximately 5.02 billion shekels, indicating active repositioning rather than thin liquidity.

Value and Sector-Balance Indices Remain Under Pressure

Value-oriented stocks declined 0.22 percent, suggesting that investors remain cautious toward previously favored names. While losses were not as severe as yesterday’s drop, the limited number of advancing stocks indicates that confidence has yet to return decisively to this segment.

The sector-balance index fell 0.45 percent, reflecting weakness across multiple industries. Selling was broadly distributed, though less intense than the prior session. The overall pattern suggests a consolidation phase rather than a dramatic breakdown, but sentiment remains fragile.

The persistence of declines in mid-cap and sector-balanced stocks indicates that investors are still reassessing risk exposure following this week’s volatility.

Bond Markets Offer Limited Stability

Fixed income markets displayed mixed behavior. Short-term bonds rose 0.05 percent, suggesting mild demand for safety at the front end of the curve. However, the broader bond index declined 0.07 percent, and inflation-linked bonds fell between 0.10 and 0.17 percent.

Bond market turnover reached approximately 5.82 billion shekels, reflecting substantial activity. The absence of a strong rally in bonds suggests that investors are not engaging in aggressive defensive positioning. Instead, portfolio adjustments appear measured and balanced.

The soft performance in both equities and bonds points to a broader recalibration rather than a traditional risk-off move where one asset class clearly benefits.

Forward-Looking: Watching for Stabilization or Further Weakness

As markets move into the next trading session, attention will focus on whether large-cap stocks can continue to provide relative stability. Holding key support levels in the Tel Aviv-35 index may help prevent further downside momentum.

Mid-cap and banking stocks remain critical sentiment indicators. Continued declines in these segments could deepen the consolidation phase, while signs of stabilization would suggest that selling pressure is easing.

Bond market behavior will also be closely monitored. A stronger move into fixed income could signal rising caution, whereas stabilization or recovery in bonds may reflect balanced positioning.

Opportunities may emerge if valuations in oversold segments become attractive to long-term investors. However, risks remain elevated if negative breadth persists and volatility continues. The coming session will help determine whether the market finds a floor or extends its corrective phase.