The war hasn’t stopped the Tel Aviv Stock Exchange: up 100 per cent from its lows and a new record for 2026
Whilst Israel continues to grapple with conflicts that began following the massacre of 7 October 2023, the stock markets are taking investors by surprise. The TA-125 and TA-35 indices are gaining ground again in 2026, buoyed by the technology, defence and financial sectors. The Israeli market has become one of the most surprising stories in global finance
by Vito Lops
Whilst global investors’ attention remains focused on Wall Street, artificial intelligence and the next moves by central banks, there is one market that has surprised almost everyone over the past two years with its resilience. That market is Israel’s. Despite a war that has been raging since the Hamas attack on 7 October 2023 – and which has drawn Israel first into the Gaza Strip and subsequently into an increasingly widespread conflict with Hezbollah in Lebanon, the Houthis in Yemen and, more recently, Iran – the Tel Aviv Stock Exchange continues to demonstrate a relative strength that few would have imagined in the aftermath of that day.
The war situation
Since the start of 2026, the TA-125 index – the main benchmark for the Israeli market, comprising the 125 companies with the highest market capitalisation – has risen by around 11%. The performance of the TA-35, the blue-chip index, has been even better, gaining around 15% in the first six months of the year.
These figures take on particular significance when viewed in the context of recent years. In 2025, the TA-125 had recorded a rise of more than 50 per cent, whilst the TA-35 had gained over 53 per cent, placing it amongst the world’s best-performing stock markets.
Last year
What sets the Israeli case apart is that this rise occurred whilst the country was embroiled in a military conflict which, over the course of several months, has gradually escalated. The war against Hamas in the Gaza Strip has given way to a direct confrontation with the so-called ‘axis of resistance’ backed by Tehran. Investors therefore found themselves assessing not only the economic costs of the war, but also the risk of Iran’s direct involvement – a possibility which, in recent months, has repeatedly fuelled tensions in the energy markets and driven up oil prices. In the first five months of 2026, the Tel Aviv Stock Exchange repeatedly set new all-time highs. The TA-125 index surpassed the 4,400-point mark, whilst the TA-35 index reached 4,628. The rally was driven primarily by corporate results, which remained robust despite an international environment characterised by persistently high inflation, restrictive interest rates and a slowdown in global growth.
The resilience shown in the first quarter was particularly significant. During the military operation known as ‘Lion’s Roar’, which lasted almost forty days, investors did not abandon the market. On the contrary, the TA-35 closed the quarter with a gain of nearly 13 per cent, whilst the TA-125 gained almost 10 per cent, outperforming numerous Western stock markets.
