One might have thought this morning, after the announcement of the memorandum of understanding between the US and Iran, that the Tel Aviv Stock Exchange would jump in line with other stock exchanges around the world. But about an hour after the opening, the main indices turned downwards, and it would appear that local investors believe that the emerging agreement is good for the US and the world but not so good for Israel. Hope thus turned to disappointment, and the Tel Aviv 35 Index is currently down 1.33%. The Tel Aviv Insurance Index is down by more than 4% and the Tel Aviv Banks5 Index is 2.87% off.

Eran Goldring, CIO at investment house Analyst, told "Globes" following the falls in Tel Aviv this morning, "In Israel, the market doesn’t know how to digest the agreement. According to most of the commentators, the agreement is not good for Israel and restricts its freedom of action. In addition, pricing in Israel had already reached equilibrium with the rest of the world. Prices in Israel are not cheap they way they were before the beeper operation, and the euphoria that followed that operation has dissipated. Interest rates will probably fall because of the fall in inflation, and that isn’t good for the banking sector."

First International Bank trading room manager Idit Moskovitz said, "Thus far it appears that the agreement does not indicate to Israel the removal of the long-term security threats, which was priced into the appreciation of the shekel. An agreement that does not serve the State of Israel and includes diplomatic dictates concerning military activity on the various fronts and in practice creates a threat to the security of the country could contribute to a weakening of the shekel. On the other hand, further rises on US markets and further hedging by the financial institutions will continue to be a significant factor supporting appreciation of the shekel."

The shekel is in fact strengthening in response to the optimism that has taken over on capital markets. The main global stock indices are rising sharply, and the shekel is strengthening accordingly. Moreover, the fall in oil and natural gas prices has led to a moderating of expectations of an interest rate rise in the US and to a slight weakening of the US dollar, which also contributes to the strengthening of the shekel against it.

Hapoalim chief markets strategist Modi Shafrir says, "The US and Iran have announced that agreement has been reached of terms of a ceasefire, and the agreement will be signed on Friday in Geneva. The ceasefire is expected to allow free movement in the Strait of Hormuz without Iran collecting a transit fee, and removal of the blockade on Iran. There are however gaps between the versions of the two sides, with Iran stressing that the ceasefire will also include Lebanon."

Goldring says that the US-Iran agreement has good aspects for Israel. "The agreement is good in that the war is over and it will be possible to release reserve soldiers in Israel. Day-to-day defense expenditure will fall, and so it’s good for the economy, and for opening the skies. As far as the world is concerned, it’s a good event. As far as Israel is concerned, we are perhaps in a less good position than we were in two or three months ago. We’ll have to see what happens after the 60-day period of negotiations."

Published by Globes, Israel business news - en.globes.co.il - on June 15, 2026.

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