Israel’s markets have soared despite three years of war and political turmoil, but some investors see further upside if the Opposition defeats Prime Minister Benjamin Netanyahu in Tuesday’s (October 27, 2026) election, potentially easing regional tensions and political risk.
With both Mr. Netanyahu and Mr. Eisenkot vowing to maintain pressure on Hamas and Iran, markets are focused on their broader policy differences. But the prospect of gains under an Opposition government does not mean investors expect Israeli assets to suffer if Mr. Netanyahu remains in power. Stocks and bonds have proved remarkably resilient through years of war and political upheaval, and some investors remain confident in the economy regardless of the election outcome. For some investors, however, the more attractive election trade lies outside Israel.
JPMorgan estimates the shekel could swing as much as 3% depending on the result. An opposition victory that improves relations with Western allies and halts a judicial overhaul that sparked mass protests in 2023 could strengthen the currency, JPMorgan said, while another Netanyahu-led government could weaken it.
Billionaire investor Bill Ackman, while stopping short of backing a candidate, said a government without far-right ministers Itamar Ben-Gvir and Bezalel Smotrich would signal that Israel was “turning a new page”, potentially helping rebuild its international credibility and expand the Abraham Accords with its neighbours. TT International’s Jean-Charles Sambor said an Opposition victory or weakened Netanyahu government could ease regional tensions and benefit Lebanese bonds.
IBI Investment House also expects an Opposition victory to lift the markets.
“From a capital markets perspective, this would likely be reflected in a decline in Israel’s risk premium, appreciation pressure on the shekel, and a positive reaction in the local market,” IBI’s Chief Economist Rafi Gozlan said. “The most significant issue is what the result will mean for the region,” said Equity Bank’s chief economic adviser Charlie Robertson. “If Netanyahu is reelected it might increase the chances of further escalation with Iran, whereas a defeat might be seen as lessening the tensions.”
