The Tel Aviv Stock Exchange hit new highs on October 15, 2025, following the release of all living hostages and a ceasefire in Gaza. This boost caps a strong two-year rally amid ongoing conflicts, with experts predicting more growth ahead.
Market Hits Record Levels
Stocks in Tel Aviv opened with strong gains after the hostage deal and ceasefire took effect. The benchmark TA-125 index rose 1.1 percent in early trading, building on a 37 percent increase since the start of 2025.
This surge reflects investor optimism over the end of the two-year war. Reports show the index has climbed more than 81 percent over the past two years, outpacing major global markets.
Analysts note that the market’s resilience during wartime has drawn international attention. Construction stocks led the gains, while defense shares saw some pullback as peace prospects grew.
The shekel also strengthened against the dollar, supporting broader economic confidence.
Key Gains and Comparisons
The Tel Aviv exchange has performed exceptionally well compared to others. It ranks among top Western markets despite regional tensions.
Here are some standout performers:
- TA-125 index: Up 81 percent since October 2023.
- TA-35 index: Gained 1.5 percent on October 10, 2025, reaching 3,250.94.
- Overall market: 141 stocks have doubled in value since the October 7, 2023, attack.
To highlight the global context, consider this comparison table of two-year returns:
| Index | Two-Year Return (%) | Key Driver |
|---|---|---|
| TA-125 (Tel Aviv) | 81 | Ceasefire optimism and tech growth |
| S&P 500 (US) | 56.7 | Broad economic recovery |
| Nasdaq (US) | 71.5 | Tech sector boom |
| Euro Stoxx 50 (Europe) | 45 | Mixed recovery post-inflation |
These figures show Israel’s market leading in growth, fueled by hopes for stability.
Investors point to the hostage release and ceasefire as turning points. The deal, mediated with US involvement, included the freeing of 20 remaining hostages and over 1,700 Palestinian detainees.
Analyst Views on the Rally
Experts remain bullish on the market’s future. Yotav Kostika from Mor Investment House called the year’s performance phenomenal. He highlighted the removal of uncertainty around the deal as a major positive.
Kostika suggested that expanding diplomatic ties, such as with Saudi Arabia, could drive even more gains. Normalization might open new trade avenues and boost prosperity.
Modi Shafrir of Bank Hapoalim agreed, noting the market has not yet fully priced in such possibilities. He warned of short-term profit-taking in sectors like defense but sees room for upside.
Other analysts echo this sentiment, predicting continued inflows as global funds return to Israeli assets. Falling bond yields and a stronger shekel add to the positive outlook.
The rally aligns with broader trends, including US President Donald Trump’s role in brokering the peace plan.
One economist noted that positive momentum depends on full ceasefire implementation. Without it, gains could stall.
Impacts on Sectors and Economy
Different sectors reacted variably to the news. Construction firms soared on expectations of rebuilding and investment in infrastructure.
Airline stocks dipped slightly due to currency shifts, but overall sentiment stayed upbeat.
Defense companies, which thrived during the conflict, faced some selling pressure. This shift marks a pivot toward peacetime growth.
On the economic front, the ceasefire could ease pressures on Israel’s budget. Reduced military spending might free up resources for tech and innovation, key drivers of the exchange.
Recent events, like US strikes on Iran earlier in 2025, had already pushed stocks higher. The hostage deal builds on that momentum.
Broader Middle East stability could attract foreign investment, further supporting the market.
Looking Ahead to More Growth
Looking forward, analysts see potential for the Tel Aviv exchange to keep rising. If ties with Saudi Arabia normalize, it could be a game-changer.
The composition of Israel’s next government will also influence investor confidence. Elections loom, adding an element of uncertainty.
Despite this, the market’s track record suggests resilience. With the war’s end, focus shifts to recovery and expansion.
Experts advise watching for progress on peace accords. Continued stability could lead to sustained gains.
In summary, the Tel Aviv Stock Exchange’s surge after the Gaza ceasefire and hostage deal signals a bright path ahead. Share your thoughts on this market rally in the comments below, and feel free to pass this article along to fellow investors.
