Honestly, if you looked at the headlines over the last two years, you’d probably think the Israeli economy was a total write-off. War, political upheaval, and those stressful credit rating downgrades from Moody’s and S&P—it's enough to make any sane investor look elsewhere.
But then you look at the actual numbers on the tel aviv stock market, and the disconnect is kind of wild.
While everyone was bracing for a crash, the TA-125 index didn't just survive; it went on a tear. In 2025, it jumped by 51%. To put that in perspective, the S&P 500—which had a great year—only climbed about 17%. The TA-35, which tracks the biggest heavyweights like Teva and Bank Leumi, did even better, closing the year up 51.6%. It’s a classic case of the "wall of worry." Investors were so pessimistic that even a shred of decent news sent the market mooning.
The Weird Reality of the 2026 Shift
If you're looking to jump in now, you've got to understand that the exchange just went through its biggest structural change in decades.
Starting January 5, 2026, the Tel Aviv Stock Exchange (TASE) officially ditched its Sunday-to-Thursday schedule. They finally moved to a Monday-to-Friday trading week. It sounds like a small logistical tweak, but it’s basically a massive "open for business" sign to the rest of the world. For years, global funds hated that Israel was open on Sundays when the rest of the world was at brunch, and closed on Fridays when the US and Europe were most active.
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The CEO of the exchange, Ittai Ben-Zeev, has been pushing this for a while. He knows that to get the big passive money from firms like BlackRock and Vanguard, the tel aviv stock market needs to sync up with the global rhythm.
Why the Banks are Printing Money
You can’t talk about the TASE without talking about the banks. They are the engine room. In 2025, the TA-Banks index rose by over 60%.
Why? It’s not just high interest rates, though those definitely helped the bottom line. It’s also the sheer resilience of the Israeli consumer. Even with the war, people kept buying houses and businesses kept borrowing. Bank Leumi actually hit a market cap of 100 billion shekels last year—a massive milestone for a local player.
But here’s the kicker: despite these gains, some analysts think they’re still "cheap" compared to European or US peers. When S&P revised Israel's outlook from negative to stable in late 2025, it was like a green light. Foreigners poured about $2.3 billion into Israeli stocks last year alone.
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The Defense Boom Nobody Expected
We all know Israel is a tech hub, but the real star of the tel aviv stock market lately hasn't been a flashy AI app. It’s been defense.
Check out a company called NextVision. They make stabilized camera systems for drones. In 2025, their stock price soared by a staggering 253%. They moved from the mid-cap index straight into the TA-35. Then you have Elbit Systems, which is basically the backbone of the defense sector here. With global tensions rising—not just in the Middle East but in Ukraine and Taiwan—the demand for Israeli battle-proven tech is at an all-time high.
How to Actually Trade the TASE
If you aren't sitting in a high-rise in Tel Aviv, how do you actually buy this stuff?
You've basically got three paths:
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- Dual-Listed Stocks: Many of the biggest Israeli names are also on the Nasdaq or NYSE. Think Teva Pharmaceuticals, Check Point Software, or Nice Ltd. These are the easiest to buy through a standard US broker like Schwab or Fidelity.
- ETFs: This is the "lazy but smart" way. The iShares MSCI Israel ETF (EIS) is the big one. It gives you a slice of the whole market without having to pick winners.
- Local Brokerage: If you want the "real" experience—trading the smaller TA-90 companies or getting into the local bond market—you’ll likely need a local account. Firms like Meitav Trade or IBI allow foreigners to open accounts, but be ready for some "Know Your Customer" (KYC) paperwork. You usually need at least 10,000 shekels (around $2,700) to get started with an independent account.
The 2026 Outlook: Not All Sunshine
I’m not going to sit here and tell you it’s a risk-free bet. That would be a lie.
The OECD projects Israel's GDP growth will hit 4.9% in 2026, which is fantastic, but that’s entirely dependent on the ceasefire holding. If things flare up again, those projections go out the window. Plus, the government is dealing with a massive budget deficit from the war. They’re looking at a 4.8% deficit for 2026, and that means taxes might go up or public spending might get slashed.
Also, watch the tech sector. While defense is booming, the "pure" high-tech stocks on the TASE actually underperformed in 2025. There’s a bit of a "K-shaped" recovery happening where some sectors are flying and others are still licking their wounds.
Actionable Steps for Your Portfolio
If you’re looking at the tel aviv stock market as your next move, don't just FOMO into the top gainers.
- Look for the "Reflation" Play: If you believe in the 5% GDP growth forecast for 2026, the retail and construction sectors are currently lagging behind the banks. The TA-Construction index only rose 10% in 2025. If people start moving back home and building again, that’s where the value might be.
- Check the Currency: Remember you’re buying in Shekels. If the Shekel strengthens against the Dollar or Euro, your returns get an extra boost. If it weakens, it eats your profits. The Bank of Israel has $232 billion in reserves, which they use to keep the currency from swinging too wildly, but it’s still a factor.
- Diversify via TA-125: Don't just stick to the TA-35. The TA-90 (the next 90 largest companies) often has more "room to run" because it isn't as crowded with institutional money.
The Israeli market has a weird habit of surprising people when things look the darkest. Whether 2026 maintains the 2025 momentum depends on the geopolitical "quiet," but the structural changes to the exchange are finally making it a legitimate destination for global capital.