Israeli financial markets closed today, February 26, 2026, with another wave of selling that deepened the corrective phase seen earlier this week. Major indices posted notable declines, and both equity and bond markets experienced elevated turnover, suggesting active portfolio repositioning amid heightened caution.

Large Caps and Value Stocks Under Pressure

The Tel Aviv-35 index fell 1.47 percent, marking one of the sharper declines in recent sessions. Only eleven stocks advanced within the index, while twenty-three declined, highlighting continued weakness among blue-chip names. The decline in large caps signals that selling pressure is no longer confined to mid-cap or higher-beta segments.

The broader Tel Aviv-125 index dropped 1.19 percent, reinforcing the widespread nature of the downturn. Advancing stocks were significantly outnumbered by decliners, underscoring persistent negative breadth across the market.

Value-oriented stocks experienced even steeper losses, declining 1.73 percent. The limited number of advancing stocks in this segment indicates strong profit-taking and reduced appetite for positions that previously showed resilience. The sector-balance index also declined 0.81 percent, reflecting weakness across multiple industries rather than isolated sector-specific issues.

Mid-Caps Continue to Struggle

Mid-cap shares posted another session of weakness. The Tel Aviv-90 index slipped 0.31 percent, while the combined Tel Aviv 90 and banking index fell 1.25 percent. Financial stocks, which often serve as sentiment indicators, faced renewed selling, contributing to broader market pressure.

Although the percentage decline in mid-caps was smaller than in large caps today, breadth remained negative. More stocks declined than advanced, suggesting ongoing caution among investors.

Equity market turnover reached approximately 5.94 billion shekels, reflecting elevated trading activity. High turnover during declining sessions often signals institutional repositioning rather than passive selling.

Bond Markets See Significant Turnover and Declines

Fixed income markets also experienced notable weakness. The general bond index fell 0.22 percent, while inflation-linked bonds declined between 0.18 and 0.31 percent. Short-term bonds slipped 0.04 percent, indicating softness even at the front end of the yield curve.

Bond market turnover surged to approximately 10.52 billion shekels, one of the higher activity levels in recent sessions. The broad decline across bond categories suggests pressure beyond equities and indicates a more comprehensive adjustment in investor allocations.

The simultaneous weakness in both equities and bonds reflects a challenging environment where liquidity adjustments and risk recalibration dominate market dynamics.

Forward-Looking: Monitoring Volatility and Potential Stabilization

As markets approach the next trading session, the focus will be on whether selling pressure begins to ease. Key support levels in large-cap indices will be critical for restoring confidence. A stabilization in value and financial stocks may signal that the corrective phase is nearing exhaustion.

Bond market behavior will also remain essential. Continued declines could indicate ongoing repositioning, while stabilization may help calm broader sentiment. Elevated turnover suggests that investors are actively reassessing exposure, and volatility may persist in the short term.

Opportunities may emerge if valuations in oversold sectors attract long-term buyers. However, risks remain elevated if negative breadth and high turnover continue. The coming session will be pivotal in determining whether the market finds footing or extends its correction further.