Five things to know ahead of the stock market opening

Trading review: ongoing reports, trends, indices, stock prices, bonds, foreign exchange, commodities, and analyst recommendations. 08:10.

1. Stock market

After treading water last week, investors in Tel Aviv are hoping for a better week, but the clouds over the markets have not yet passed. Here, security tensions are rising on several fronts — Gaza, Lebanon, and Syria. Globally, markets are turbulent: government bond yields are at multi-decade highs, oil prices are climbing and threatening inflation, and the trade war is renewing: this time between the USA and Canada, which imposed new tariffs on each other over the weekend. On the US-Iran front, there is also no good news, and now details are awaited on US sanctions against Iran.

Dual-listed stocks are returning from Wall Street also without good news — Camtek and Nova with negative gaps of over 3%, Tower will lose about 1.5%, while Palo Alto and Teva will advance by over 1%. Bright spots can be seen in the recovery recorded on Wall Street on Friday and in the decline in oil prices this morning, which will affect some energy stocks. Within the earnings season, Navitas Petroleum, Fox, and Terminal X will report today, among others. Later this week, insurance companies are expected to set the tone; Phoenix and Menora will report tomorrow, Harel on Wednesday. The stock exchange closed the previous week with a mixed trend; the TA-35 index fell by about 0.7%, the TA-90 index advanced by about 0.8%, and the TA-125 index weakened by about 0.4%. The gains were led by the insurance index, which jumped by about 5%, followed by the TA-Oil & Gas index, which strengthened by about 3.5% thanks to the rise in oil prices. On the other hand, the technology index lost about 4.2% of its value.

Markets in Asia are trading this morning with a mostly negative trend, against the backdrop of weakness in technology stocks. In Japan, the Nikkei is falling, in South Korea, the Kospi is losing 3%, in China, the CSI 300 index is falling slightly, and in Hong Kong, the Hang Seng is falling by about 1.6%. Alibaba stock is attracting attention and plunging by about 8% in Hong Kong after completing a fundraising of 80 billion Hong Kong dollars at a discount of 8.4%. Samsung is plunging by about 7.5% in Seoul after investors were disappointed by the volume of share buybacks and the lack of detail regarding profit distribution. SoftBank is also notable with a decline of 3.8% in Tokyo after announcing a record bond issuance.

On Wall Street, index futures are stable. After the strong earnings season pushed stock indices on Wall Street to gains, the indices took a break in the past week — as the bond market moved to center stage. The S&P 500 index broke a three-week winning streak, on its way to a weekly decline of more than 1%. The Nasdaq fell by 2% and also ended a three-week winning streak, while the Dow Jones index fell by almost 1% this week, the second consecutive week of declines. The rise in long-term bond yields raised concerns regarding the ability of the economy and financial markets to continue dealing with a higher interest rate environment.

The trading week that will open this afternoon will be particularly busy. In focus will be Nvidia's reports, which will be published on Wednesday and will put the enthusiasm for AI investments to the test, as well as the inflation figure preferred by the Fed — the core PCE index. At the end of the week, senior central bank officials, led by Fed Chair Kevin Warsh, will speak at the Jackson Hole conference — in an attempt to get hints regarding the interest rate path.

The rotation on Wall Street is already being reflected in the numbers. The RSP ETF, which gives equal weight to all S&P 500 stocks instead of giving a larger weight to giant companies, has raised more than 12 billion dollars since the beginning of the year, and its assets have crossed the 100 billion dollar mark for the first time. Since the beginning of the year, it has even achieved a return about 3 percentage points higher than that of the S&P 500. At the same time, the Magnificent Seven, which together make up about a third of the index, recorded a return of about 0% in the first half of the year, compared to a 9.3% rise in the S&P 500. Behind the change is also the fear of concentration. The ten largest companies already account for almost 40% of the S&P 500's weight; investors are starting to ask whether the high valuations and huge investments in AI infrastructure will indeed justify themselves. At the same time, the rally in the market is expanding to more sectors and companies outside the mega-cap group. According to Nathan Grazi, president of NovaDius, the shift to equal-weight investing allows investors to reduce concentration risk and be more exposed to the continued expansion of market leadership.

2. Bond market

US bond yields returned to rise on Friday, close to the peak levels of more than a decade, despite the efforts of Treasury Secretary Scott Bessent to curb financing costs. The 30-year bond yield rose to about 5.28%, while the 10-year yield climbed to about 4.74%.

Matan Shitrit, chief economist at Phoenix, lists the reasons for the rise in yields. With a high rate of Treasury issuances that the market's natural buyer base is struggling to absorb without demanding higher compensation when the interest rate environment is high, and interest payments on national debt that crossed the 40 trillion dollar mark this week continue to grow, the deficit is expanding through the interest expense item — something that requires more issuances and creates additional pressure on yields (a cycle that feeds itself and worsens the problem). Corporate bond issuances for AI financing needs compete for the same investor base and push some demand from government to corporate.

Ongoing geopolitical uncertainty — oil prices have returned to rise against the backdrop of ongoing uncertainty in the Middle East, which also brings back to the table the fear of renewed inflation pressures. Shitrit also notes the sticky inflation and the erosion of the Fed's credibility, which avoids presenting a clear path for curbing price pressures. When investors doubt the Fed's commitment or ability to return inflation to the 2% target, they demand a higher inflation risk premium — especially in long-term bonds. Bottom line, investors are demanding higher compensation (risk premium) for holding long-term bonds.

"US Treasury Secretary Scott Bessent tried to calm the market also through various statements after the announcement of the move, but ultimately it is important to remember that such or other intervention does not solve the root of the problem — those same fundamental factors, as mentioned, that continue to push long-term yields upward". Bessent said that the Treasury Department has a "large toolbox" for intervening in the bond market, and added that the administration is expected to announce in the coming days an increased focus on reducing the deficit and tightening fiscal discipline.

The renewed rise in yields on Friday indicates that the Treasury's move to increase purchases of long-term bonds succeeded in calming the market only for a short time. Concerns about the US deficit, the volume of debt, and the large fundraisings of technology companies to finance investments in AI continue to weigh on long-term bonds. "Unlike quantitative easing (QE) by the Federal Reserve, the Treasury Department cannot create money to finance asset purchases," wrote Ulrike Hoffmann-Borcardi, chief investment officer of UBS in America. "Any buyback must be financed from another source, likely through increasing the issuance of short-term bonds or adjustments in other parts of the financing plan."

"In fact, the action changes the duration profile of the debt held by investors, instead of reducing the amount of debt that markets need to absorb. It does not eliminate the government's financing needs and does not solve the concerns about the volume of government bond supply," she wrote.

3. Commodity and currency markets

The price of oil is falling this morning by about 1% ahead of the economic blockade that the US is about to announce on Iran. Brent oil is trading this morning at 93 dollars. In the currency market, the shekel is trading unchanged for now against the dollar — 2.987 shekels to the dollar. Globally, the dollar continued to weaken. The DXY dollar index, which measures the value of the US currency against a basket of currencies, is trading this morning stably around 98 points — its lowest level since May. The dollar has weakened recently after the US acted to support the weakening Japanese yen, through selling euros and buying yen in cooperation with the Japanese Ministry of Finance. The US on increasing purchases of long-term bonds returned concerns among investors about the "erosion" of the dollar's value, wrote Jonas Goltman from Capital Economics.

Bitcoin ended the week with a rise of over 20% and is trading around 77 thousand dollars. This morning, stability is recorded for now. The enthusiasm in the crypto market renewed after US Treasury Secretary Scott Bessent announced on Wednesday that the Treasury Department would at least double the volume of long-term bond purchases. The move ignited the rally and led to the liquidation of short positions in the amount of billions of dollars. On the same day, President Donald Trump met with leaders of the crypto industry, which added to the optimism in the market. "The significant trigger for the rise in Bitcoin was the Treasury Department's move to buy back bonds at the long end of the yield curve," wrote analysts at Bernstein, referring to the Treasury's announcements this week about expanding bond purchases. "We are not macro experts, but we know that Bitcoin has historically reacted positively to liquidity expansion." Another reason is President Trump's call to Congress to stabilize regulation in the crypto field.

The decline of the dollar ignited, in turn, demand for precious metals. Gold futures rose by 5.6% this week, and closed today at 4,624.10 dollars. This is the third consecutive weekly rise for the precious metal, which recorded a rise of more than 14% over this period. Silver futures, also in a three-week winning streak, rose even more and finished at 69.5 dollars per ounce, the highest price since June 17. Meanwhile, billionaire Ray Dalio said that investors should reduce their bond holdings and direct up to 15% of their money into gold, as a hedge against the risk of an American debt crisis, which he claims could arrive as early as three years from now.

4. Macro

In focus this week will be the PCE report for July — the inflation index preferred by the Fed that examines the change in prices of all household consumption in the US. The market expects a rise of 0.1% in July, which will reflect a slight decrease in the annual inflation rate from 3.7% to 3.6%. But more than this figure, it seems that the markets will be surprised by the annual conference in Jackson Hole, which will be the first for the new Fed Chair Kevin Warsh, arriving at a particularly challenging time, when the 30-year bond yield is around a peak of about two decades. Many analysts pointed out that the US Treasury Department's intervention in the debt market in favor of lowering yields undermines Warsh's approach, which advocates for reducing the signals provided by the Fed and relying on the information provided by the markets — so against this background, his words will be examined under a magnifying glass.

5. Forecast

Despite the ongoing challenges, leading analysts on Wall Street are optimistic about the prospects of some stocks, thanks to their growth potential in the long term and their exposure to profitable areas of activity, including AI. Here are three stocks supported by some of the most prominent analysts on Wall Street, according to TipRanks — a platform that ranks analysts based on their past performance.

CrowdStrike. Cyber company CrowdStrike is expected to publish its financial results for the second quarter on Wednesday. Ahead of the report, analyst Junaid Siddiqui from Truist reiterated a "buy" recommendation for the stock and raised the target price to 245 dollars (about 28% above its current price). After CrowdStrike's impressive performance in the first quarter and the raising of the forecast, Siddiqui expects another strong quarter. The analyst's optimism relies on the continued strength in the adoption of Falcon Flex and on encouraging activity in the field of large deals.
Dell. The stock of personal computer manufacturer Dell has jumped by 251% since the beginning of the year, against the backdrop of strong demand for AI servers. Recently, analyst Amit Daryanani from Evercore reiterated a "buy" recommendation for Dell stock and raised the target price from 500 to 550 dollars (25% above its current price). The analyst argues that while Dell's AI computing field is attracting investor attention, the company's storage business is not receiving enough appreciation, and they are well-positioned to accelerate revenues and profits.
SanDisk. SanDisk is benefiting from the demand generated by AI for its memory and storage products. After the company's investor day in 2026, analyst Harlan Sur from J.P. Morgan began re-covering SanDisk stock with a "buy" recommendation with a target price of 2,250 dollars or a jump of 40%. The analyst believes that SanDisk is well-positioned to take advantage of a structural change in demand for NAND memory, driven by strong growth in AI inference applications. His optimism relies on three key factors. First, Sur believes that SanDisk's new business model (NBM), based on long-term agreements, has improved the company's profit margin profile and reduced the cyclicality in its business. Second, Sur points to the growth in the NAND market and expects the total addressable market to jump from about 70 billion dollars in 2025 to about 300 billion dollars in 2026 and to about 500 billion dollars in 2027.