Israeli Markets Hit All-Time Highs Amid Military Conflict With Iran

Israeli markets achieved record peaks on March 2, 2026, bucking a global downturn despite the onset of a joint U.S.-Israeli military campaign against Iran.

Markets Reach New Peaks

Israeli financial markets surged Monday, March 2, 2026, just two days after the launch of a joint military operation with the United States against Iran. While global markets retreated under the shadow of a widening regional conflict, the Tel Aviv Stock Exchange (TASE) saw record-breaking gains, and the shekel strengthened significantly against both the dollar and the euro.

The benchmark TA-35 index climbed 4.61% to reach a new all-time high of 4,318.50 points. The broader TA-125 index followed suit, advancing 4.75% to a record 4,268.43 points. Trading volumes were exceptionally high, which local observers said signaled a vote of confidence in the military operation.

Among the notable sector performers were insurance firms Clal, Harel and Menorah Mivtachim, which all surged by more than 9%. Banking and defense stocks also showed strong gains, with Bank Leumi leading the market in turnover. However, energy was the lone sector to see declines as regional instability weighed on future outlooks.

In the foreign exchange market, the shekel’s resilience was even more striking. While geopolitical escalations typically drive investors toward the U.S. dollar, the opposite was true in the Israeli market. The dollar fell 1.93% locally, trading at approximately 3.07 shekels, while the euro declined 2.76% to roughly 3.60 shekels.

This appreciation comes as the U.S. Dollar Index (DXY) rose 0.7% to 98.2 globally, highlighting what a local report described as a unique “Israeli exceptionalism” in the current financial climate.

Alex Zabezhinsky, chief economist at Meitav, noted that war does not always equate to a weaker currency for Israel. He pointed to previous conflicts where the shekel initially dipped only to appreciate significantly by the end of hostilities.

Global Markets Retreat as Oil Concerns Rise

However, the costs remain staggering. During the last major round of fighting with Iran, direct costs were estimated at $554 million (1.7 billion shekels per day), with total GDP losses reaching approximately $6.5 billion (20 billion shekels) over 12 days.

“It is not at all certain that the shekel will lose value during the war,” Zabezhinsky cautioned, “though today’s price levels are significantly different from previous periods.”

The local optimism stands in stark contrast to international sentiment. As of Monday morning, Asian markets were down sharply, and futures for Wall Street and European exchanges were trading in the red. Concerns over the closure of the Strait of Hormuz have already sent global oil prices climbing, adding to fears of a renewed inflationary spike.

The TASE will be closed on March 3 for the Purim holiday, leaving investors to process the rapid developments of the war’s opening days.

FAQ ❓

• Why did the Tel Aviv Stock Exchange surge? Confidence in the joint U.S.-Israel operation drove record-breaking gains.
• How did the shekel perform against global majors? The shekel strengthened as the dollar and euro fell locally.
• How did international equities react to the conflict? Asian, U.S., and European markets retreated on war and oil fears.
• What role does the Strait of Hormuz play? Concerns over shipping disruptions pushed global oil prices higher.