Weekly market review: technology leads declines as the Fed holds rates

The Federal Reserve kept its target range unchanged at 3.75%-4.00% on October 28. The decision passed by a 10-2 vote, with two members preferring a quarter-point increase. The Fed said economic activity continued to expand at a strong pace and inflation remained elevated. US real GDP grew at a 3.4% annualized rate in the third quarter, while the PCE price index rose 3.6% over the 12 months through September.

In Israel, the Bank of Israel policy rate is 3.25%, while the latest 12-month inflation rate is 1.6%, within the 1%-3% target range.

The 10-year US Treasury yield declined from 5.00% on October 23 to 4.98% on October 29, the latest official observation published for the week. That is a 2-basis-point decline in yield to maturity. A lower yield generally supports bond prices, but the yield move is not an investor's realized return, which also depends on purchase price, coupon and duration.

TA-35 closed at 4,058.95, down 1.58% from 4,124.13 on October 23. TA-125 ended at 3,936.27, down 2.45% from 4,034.99. These are close-to-close calculations, not a sum of daily percentage moves.

The shortened election week was volatile. TA-35 gained 1.99% on Monday before declines returned on Wednesday and Friday. Technology shares including Tower, Nova and Camtek were among the weaker names at the end of the week, reflecting both the US technology selloff and domestic political uncertainty.

The S&P 500 fell 0.57% to 7,580.07, while the Nasdaq Composite declined 2.00% to 25,437.00. Early-week gains were largely erased on Friday, when the S&P 500 fell 1.82% and Nasdaq dropped 2.86%.

Technology shares weakened as investors questioned whether AI investment expectations and valuations had moved faster than business results. Intel's weak outlook and the scale of Amazon's investment spending added to the pressure. Meanwhile, strong growth data and the Fed's decision to wait for more information kept interest rates at the center of attention.

The Bank of Israel representative USD/ILS rate was 3.118 on October 30, compared with 3.112 on October 23. That represents a 0.19% weekly appreciation of the dollar against the shekel. Representative rates are reference points, not transaction quotes.

For an unhedged portfolio, even a small currency move affects the result measured in shekels. This week, dollar appreciation offset only a small portion of the decline in US equity indices.

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.