The stocks of Israeli defense companies sharply fell Monday amid signs of easing geopolitical tensions, while pharmaceutical giant Teva also dropped following a major policy announcement by U.S. President Donald Trump, cutting drug prices.
Shares of Israeli defense firms, which have surged to record highs in recent months, plunged as investors reacted to a series of international developments that may reduce near-term demand for advanced military technologies. These include Trump’s visit to the Middle East, the reported end of hostilities between nuclear-armed rivals India and Pakistan, and an anticipated summit between Russian President Vladimir Putin and Ukrainian President Volodymyr Zelensky.
Among the hardest hit: Aris Industries slid about 11%, NextVision dropped 10%, Aerodrome declined 9%, Third Eye fell 10% and Elbit Systems shed approximately 5.2%.
Travel and tourism stocks, which recently soared after international carriers canceled flights to Israel, also pulled back. Israir dropped 7.6% and El Al fell 1.7%, amid speculation that foreign airlines could soon resume service to the country.
The benchmark indices — TA-35, TA-90 and TA-125 — were all down less than 1%.
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Trading opened with a delay under a mechanism known as an "English opening" after Teva Pharmaceuticals plummeted more than 9% in pre-market trading, pulling down the indices. The slump followed Trump’s late-night announcement that he will sign an executive order to tie U.S. prescription drug prices to prices in other countries — a move analysts say could cut prices by as much as 80%.
Despite the initial delay, trading resumed with early gains of more than 1% in the major indices, though those later faded, and some turned slightly negative. Teva shares were last down about 5.5%.
Teva's downturn follows a string of losses in recent days. The stock fell 4.8% on Sunday and another 6.3% on Friday on Wall Street. Analysts had attributed the earlier drops to profit-taking after the company posted strong earnings and announced plans to lay off nearly 3,000 employees.
Meanwhile, U.S. futures pointed sharply higher: Nasdaq futures surged nearly 4%, the S&P 500 gained 2.8%, and the Dow Jones Industrial Average rose 2.2%. Gold prices fell 2.8% to $3,251 per ounce following the announcement of a preliminary U.S.–China tariff agreement, which was disclosed by the Biden administration Sunday and detailed further on Monday.