What's the current impact of the fresh wave of Iranian missiles on Israel's stock market?

**Bottom-line: Israel’s equity market is shrugging off the latest missile barrage—indices are still grinding to fresh record highs, and defense-linked names are enjoying a fresh leg up, but the rally is increasingly dependent on investors’ conviction that the U.S.–Israeli air campaign is wearing down Iran’s ability to fight back.** 🚀🇮🇱 --- ### 1. The big picture: record highs, record volatility • On the first trading day after the U.S.–Israeli strikes began, the Tel Aviv 35 index jumped about 4.5% to all-time highs as the shekel also strengthened against the dollar . • History shows that rounds of fighting have often been good for the exchange, provided the campaign is seen as short and decisive; prolonged conflict or failure to achieve strategic objectives would flip the market’s mood quickly . • Investors appear to be “plotting the most optimistic scenario: a relatively short campaign, with major successes and perhaps even the overthrow of the regime in Iran,” according to analysts at the College of Management in Tel Aviv . 😎📈 ### 2. Sector rotation: defense & energy lead the charge • Israeli defense and energy stocks rallied immediately after the initial missile attacks, with the shekel gaining over 1.5% versus the dollar . • A live screener of Israeli defense names in March 2026 shows Elbit Systems up 7.52% month-to-date, underscoring how quickly capital is rotating into security plays . Israeli defense stocks performance March 2026 |code|market_code|stock code|stock name|Last Price|Last Change|Theme|Inclusion Reason[20260304]|Region|Monthly Performance[20260304]| |---|---|---|---|---|---|---|---|---|---| |ESLT|185|ESLT.O|Elbit Systems|885|7.522963000000001|||Israel|| • U.S. defense contractors (Lockheed, RTX, etc.) have also posted “dramatic” share-price surges as demand for missiles and electronic-warfare gear spikes . 🛡️⚡ ### 3. Why the market may stay buoyant—for now • U.S. Central Command reports that Iran’s missile launches are down 86% from Day 1, and drone shots are down 73%, suggesting the initial shock phase is fading . • Analysts note that maintaining a high tempo of fire is becoming harder for both sides; weapons stockpiles are thinning and production is struggling to keep pace . • If this attrition trend continues, Israel’s risk premium could keep falling, supporting equities and the shekel. 📉🛡️ ### 4. Watch-outs: fatigue & oil risk • Should Iran restore its launch rate or strike deeper into Israel, the “optimistic scenario” unravels quickly—investors have warned that a prolonged war would drag the market down and widen Israeli borrowing costs . • Oil prices have already jumped more than 8% on fears of supply disruption, and any further spike could feed inflation and pressure the Bank of Israel’s policy stance . ⛽🔥 --- **Curious thought to leave you with:** If the missile exchanges keep tapering off while defense stocks keep climbing, are you ready to trim some winners—or will you ride the “risk-on” wave a bit longer? 🤔💬