Global Tech Sell-Off Sparks Market Turmoil, Tel Aviv Opens Lower
Global markets plunged as hot US inflation data drove Treasury yields up, dragging down Asian exchanges and pressuring the Tel Aviv Stock Exchange. Dual-listed tech stocks opened sharply lower, while the US dollar climbed against the shekel.
Global markets faced a severe downturn as a wave of profit-taking swept through the tech sector, driven by hotter-than-expected US inflation data that sent Treasury yields surging. Wall Street suffered its worst session in nearly three months, with the Nasdaq plunging 1.9% and the S&P 500 shedding 1.2%, snapping an unusual 53-session streak without a drop exceeding one percent. Asian markets followed the downward trajectory, led by South Korea's Kospi crashing 7.1% amid a heavy sell-off in major chip manufacturers, while Japan's Nikkei dove 4.5%.
In Tel Aviv, the local stock exchange opened lower following the negative global cues. Dual-listed shares returned with negative arbitrage pressures, weighing down the benchmark TA-35 index by approximately 0.95%. Key tech and pharma stocks led the decline, with Tower Semiconductor sinking 4.1%, Teva dropping 2.5%, and Ormat Technologies sliding 2.5%. Conversely, chip testing equipment maker Camtek provided a bright spot, posting a positive arbitrage of 2% despite raising its full-year revenue outlook to roughly $595 million, marking a 20% growth compared to 2025.
On the macroeconomic front, the US Consumer Price Index (CPI) revealed an annual inflation rate of 3.7%, well above the Federal Reserve's 2% target. The hot reading dashed hopes for imminent interest rate cuts and propelled the benchmark 10-year Treasury yield to a daily peak of 5.33%, before easing slightly to 5.1%. Market analysts warn that persistent inflation pressures could force the Fed to implement further monetary tightening, potentially pushing long-term yields even higher and increasing debt-servicing costs for consumers and corporations alike.
In the foreign exchange market, the US dollar strengthened significantly against the shekel, climbing past 3.10 shekels per dollar for the first time in six months. This surge was amplified by local institutional investors hedging their overseas equity exposure by purchasing dollars, thereby reducing local supply. Meanwhile, oil prices retreated slightly despite escalating geopolitical tensions in the Middle East and maritime disruptions in the Persian Gulf, as traders weighed ongoing supply risks against potential strategic inventory releases.
