"The watershed moment was the pager incident": 3 years of war in the Israeli stock market

Three years of war have left deep scars, but the Israeli stock market has shown remarkable vitality. GDP grew by nearly 10%, the TA-35 index surged by 130% and the TA-125 by 120% - more than the S&P 500. The high-tech sector, defense industries, and global demand drove growth, alongside the resilience of an economy that learned to recover quickly from shocks. However, the cost of the war is heavy: a cumulative GDP loss of about 177 billion shekels.

Three years of war have left deep scars on the State of Israel and its residents, but in the economic and financial sphere, Israel has shown remarkable vitality. The gross domestic product grew by nearly 10% during this period, the TA-35 index surged by no less than 130%, and the TA-125 jumped by 120% - gains higher than those of the S&P 500 (about 80%) and the Nasdaq (about 101%). However, the cost of the war is heavy: according to the Bank of Israel, the cumulative GDP loss from the start of the war until the end of 2025 amounts to about 177 billion shekels, about 8.6% of annual GDP. Economists attribute the rally to the economy's resilience, its ability to recover quickly from security shocks, and the strength of the high-tech sector, which can continue operating under war conditions thanks to remote work and global markets. The defense industries and cyber activity provided an additional boost due to large demand from the state and increased security in Europe. Among sectoral indices, the TA-Insurance stood out, surging by 490%, TA-Banks rose by 140%, and TA-Real Estate lagged behind with a 55% increase. Next Vision stock soared by 965% - the sharpest rise. In contrast, the government bond market suffered from rising yields due to an unprecedented wave of issuances to finance defense spending and the growing deficit.