The Tel Aviv Stock Exchange opened lower on Tuesday, extending a cautious tone across Israeli equities. Early trade data indicated broad-based declines across leading indices as investors monitored regional developments, U.S. market cues, and global interest rate expectations.

Blue-Chip Index Under Pressure

The TA-35 index slipped 0.52% to 3,303.12 points in morning trading, reflecting weakness in major banking and energy stocks. Out of 35 components, only four were in positive territory, while 30 declined and one remained unchanged. Market turnover for the TA-35 stood at roughly 214 million shekels, underscoring moderate investor participation.

The broader TA-125 index followed suit, falling 0.53% to 3,370.94 points, as 106 stocks retreated and only 11 advanced. The decline was largely driven by profit-taking in large-cap sectors that have seen gains over recent weeks, alongside subdued foreign investor appetite amid continued geopolitical uncertainty.

Mid- and Small-Cap Stocks Mirror Market Weakness

Mid-cap shares also traded lower, with the TA-90 dropping 0.62% to 3,602.25 points. Only seven of its 90 components advanced, while 76 declined. The combined TA-90 and Banks index also weakened by 0.64%, settling at 3,703.51 points, as financial stocks came under pressure following mixed global banking sector results and weaker shekel trends.

Trading turnover in the TA-90 group reached about 14.3 million shekels, while the banking sector contributed over 70 million shekels in value turnover, highlighting ongoing investor interest in financials despite short-term selling pressure.

Bond Market Holds Steady Amid Equity Weakness

In contrast to the equity market, Israel’s bond indices remained relatively flat. The All-Bond General Index held at 418.92 points with no change, while the short-term bond index stayed stable at 462.40 points. Inflation-linked bonds such as the Tel-Bond A and Tel-Bond 60 inched down just 0.01% to 0.02%, suggesting muted fixed-income volatility.

Trading turnover in the bond market reached around 10 million shekels, a fraction of the equity market’s activity. Stability in government and corporate bond yields suggests investors are maintaining a wait-and-see approach regarding upcoming Bank of Israel decisions and global rate trends.

Outlook: Volatility Likely as Investors Await Macro Signals

With regional uncertainty, fluctuating energy prices, and anticipation of upcoming central bank announcements, Tel Aviv markets may remain volatile in the coming sessions. Investors will likely focus on domestic inflation data, shekel exchange rate trends, and global equity cues for direction.

Although today’s pullback signals investor caution, moderate bond market stability could help anchor sentiment. Traders are watching whether institutional investors re-enter the equity market later in the week or maintain defensive positions ahead of U.S. macro data releases.