Week ending October 16, 2026
Weekly market review: Tel Aviv rallies as US technology shares retreat
Summary
The October 12-16 trading week produced a sharp divergence. The TA-35 and TA-125 gained more than 4%, while the S&P 500 and Nasdaq Composite declined. Hotter US inflation, concerns about debt-financed AI investment and higher oil prices weighed on Wall Street, while a negative monthly CPI print supported rate-cut expectations in Israel.
Market performance
| Asset | Weekly | Monthly | YTD |
|---|---|---|---|
| TA-35 | +4.0% | -1.1% | +14.5% |
| TA-125 | +4.2% | +0.4% | +11.7% |
| S&P 500 | -1.9% | +0.1% | +11.9% |
| NASDAQ | -4.5% | -2.7% | +12.5% |
| USD/ILS | +1.1% | +0.8% | -3.2% |
Macro: inflation, rates and bonds
Israel's consumer price index fell 0.5% in September, leaving 12-month inflation at 1.6%. The Bank of Israel rate is 3.25%, with the next decision scheduled for October 21.
US CPI rose 0.6% in September and 3.7% over 12 months. Core CPI rose 0.3% for the month and 2.6% over the year. The federal funds target range is 3.75%-4.00% following September's quarter-point increase.
The 10-year US Treasury yield declined from 5.24% on October 9 to 5.10% on October 15, the latest available observation for the week. That is a 14-basis-point move in yield to maturity, not a bond investment return. Actual return also depends on purchase price, duration and coupon.
Israel: a strong week
TA-35 closed at 4,224.67, up 4.01% from 4,061.71 on October 9. TA-125 ended at 4,091.37, up 4.22% from 3,925.79. These are close-to-close calculations, not a sum of daily percentage moves.
Friday's gains were broad, led by real estate, insurance and communication shares. Israel's negative monthly CPI print strengthened discussion around further monetary easing, but the Bank of Israel decision itself will be released on Wednesday.
US: technology leads the decline
The S&P 500 fell 1.95% to 7,659.44, while the Nasdaq Composite dropped 4.48% to 26,140.03. Nasdaq's larger decline reflected concentrated pressure on technology and AI-infrastructure-related shares.
Hotter-than-expected inflation renewed sensitivity to the rate outlook. At the same time, concerns about debt financing for large AI investments and rising oil prices weighed on sentiment. On Friday alone, the S&P 500 fell 1.09% and Nasdaq declined 2.14%.
Currency: the dollar strengthens against the shekel
The Bank of Israel representative USD/ILS rate was 3.089 on October 16, compared with 3.055 on October 9. That represents a 1.11% weekly appreciation of the dollar against the shekel. Representative rates are reference points, not transaction quotes.
For an unhedged portfolio, dollar appreciation can offset part of a decline in US indices when performance is measured in shekels. An index return in dollars is therefore not necessarily the return experienced by an Israeli investor.
Weekly changes compare the final trading close with the previous week's final close; month-to-date compares with September 30 and year-to-date with the end of 2025. US index returns are in dollars and exclude dividends. Figures are frozen for this edition.
The week ahead
- The Bank of Israel rate decision on Wednesday, October 21, and its accompanying communication.
- The US earnings season, including Netflix on Tuesday and Meta and Tesla on Wednesday.
- The response in technology shares, Treasury yields and oil following a volatile week.
ZAIMAK insight
The week again showed how geographic and currency diversification can create very different outcomes within one portfolio. Israel advanced while Wall Street declined, and the stronger dollar changed part of the picture for shekel-based investors. A weekly review provides context; it does not replace planning aligned with personal objectives, horizon and risk tolerance.
Sources & methodology
Numeric figures, when shown, are collected from official sources and recognized market-data providers, calculated from closing values, and checked before publication. When a figure cannot be reliably verified, it is omitted rather than shown.
- Tel Aviv Stock Exchange: TA-35 and TA-125 data for October 16, 2026
- Tel Aviv Stock Exchange: TA-35 historical data
- Tel Aviv Stock Exchange: TA-125 historical data
- FRED: S&P 500 daily closes
- Nasdaq: Nasdaq Composite
- Bank of Israel: representative exchange rates
- Bank of Israel: monetary policy
- Israel Central Bureau of Statistics: consumer price index
- US Bureau of Labor Statistics: September 2026 CPI
- Federal Reserve: September 16, 2026 rate decision
- FRED: 10-year US Treasury yield
- Reuters: October 16, 2026 global markets recap