Jordan Major
The age-old belief that “war is bad for the stock market” is facing a reality check in the Middle East.
On June 19, Iranian missiles struck the Tel Aviv Stock Exchange building in Ramat Gan, marking a historic escalation in hostilities. And yet, the Israeli market rallied.
The Tel Aviv Stock Exchange (TASE.TA) index closed at 6,137, up 1.27% on the day, extending its year-to-date gains to over 45%. Blue-chip indices Tel Aviv-35 and Tel Aviv-125 also hit fresh 52-week highs, surging to 2,810.85 and 2,850.08, respectively.
In a twist of wartime market logic, investors appear to be betting not on peace, but on resilience.
Iran Tehran Stock Exchange
Markets in Iran, meanwhile, tell a similarly paradoxical story. The Tehran Stock Exchange remains near record levels, even after recent military exchanges.
Over the past year, the index has soared, bolstered by aggressive domestic monetary expansion, a closed economy, and capital fleeing from currency devaluation.
On X, pseudonymous macro trader Mr Derivatives summed it up bluntly:
“Iran’s stock market. Booming! Now regarding their inflation rate and debasing of currency… a whole subject on its own.”
A tale of two markets?
For Israel, part of the surge is rooted in sector rotation, defense contractors, cybersecurity, and commodity-linked stocks have all outperformed.
Government support for capital markets, and expectations of fast retaliation but contained escalation, have also kept foreign money from fleeing.
In Iran, the narrative is murkier. High nominal stock returns in Tehran often reflect the collapse of the rial more than real economic strength.
