The Tel Aviv market opened lower on February 2, 2026, with major indices reflecting investor caution amid mixed macroeconomic signals. The TA-35 declined 1.38% to 3,948.49 points, while broader market measures, including the TA-90 and TA-125, posted losses exceeding 1.5%. Trading volumes indicate selective participation, suggesting a wait-and-see approach by both retail and institutional investors in the face of interest rate considerations and global economic uncertainty.

Equity Market Performance and Sector Dynamics

The TA-35 recorded a decrease of 1.38% at 3,948.49 points, with only four advancing stocks against 31 declining issues. The broader TA-90 index fell 2% to 3,911.11 points, with no advances among 88 listed stocks. Similarly, the TA-125 index dropped 1.53% to 3,934.51 points, reflecting widespread selling pressure. Mid-cap and sector-focused indices, such as the TA-90 and TA-125 Banks, also underperformed, highlighting ongoing investor caution in financial and cyclical sectors. Market participants appear to be reacting to both domestic liquidity constraints and external uncertainties in global markets, resulting in a cautious allocation of capital.

Bond Market Trends and Yield Implications

Israeli bond indices showed mixed movements, with short-term instruments remaining largely stable. The short-term bond index up to one year edged higher by 0.01% to 466.73 points, suggesting steady demand for low-risk, high-liquidity instruments. Conversely, inflation-linked bond indices, such as the Tel Aviv 60 and A-linked bonds, posted minor declines of 0.02–0.05%, signaling sensitivity to inflation expectations and potential shifts in interest rate policy. The All-Bond general index remained unchanged at 423.00 points, supported by a balanced number of advancing and declining issues. Overall turnover in the bond market reached 42.3 million NIS, indicating selective positioning by investors amid modest market activity.

Market Liquidity and Trading Sentiment

Total market turnover in equities reached 376.2 million NIS, reflecting moderate trading activity despite the broad declines across indices. Investors appear to be exercising caution, balancing exposure between high-beta equities and stable fixed-income instruments. The prevalence of declining stocks relative to advancing issues suggests that sentiment remains defensive, possibly influenced by ongoing interest rate deliberations, global market volatility, and macroeconomic forecasts. The distribution of performance across indices indicates that sector rotation and selective buying are influencing trading patterns, rather than broad speculative activity.

Forward-Looking Outlook: Key Factors for Investors

Looking ahead, market participants will likely monitor the interplay between domestic monetary policy, inflation signals, and global economic developments. Key factors include potential shifts in the Bank of Israel’s interest rate policy, international energy prices, and geopolitical risk affecting investor confidence. Equity markets may continue to experience selective volatility, particularly among mid-cap and banking stocks, while bond indices will remain sensitive to inflation-linked adjustments and liquidity conditions. For both institutional and sophisticated investors, evaluating sector-specific trends, managing exposure to high-beta equities, and maintaining diversified positions in bonds and inflation-linked instruments will be critical for navigating the current market environment.