Israel stocks — those based in or with strong ties to Israel — sank Monday while leading U.S. defense names and energy stocks rallied following the surprise terrorist attack on Israel carried out by Hamas Saturday. In response, Prime Minister Benjamin Netanyahu declared war on Hamas, launching Israel's first war since 1973.
Hamas, which is designated as a terrorist organization by the U.S., on Saturday launched air, land and sea attacks on Israel, with thousands of missiles and forces infiltrating throughout much of the country's south. At least 700 Israelis are confirmed dead while Hamas claims it has taken more than 100 people hostage.
Israel's Minister of Defense ordered a "complete siege" of Gaza, cutting off electricity, food, fuel and water. Israel reportedly bombarded Gaza with airstrikes as the conflict entered its third day. The Israeli military moved to retake territory in the country's south. Around 500 Palestinians have died, according to Gaza's health ministry.
The U.S. State Department confirmed Monday morning on CNN that nine U.S. citizens have been confirmed killed.
Market Reaction
In market action, Israel-based stocks booked heavy losses early Monday. SolarEdge, headquartered in Herzliya, just north of Tel Aviv, sank 3.8% in Monday market action. Energy stocks rallied broadly Monday along with defense stocks. However, travel and airline plays dropped.
Delta Air Lines lost 4.7% Monday as United Airlines also shed 4.8%. A number of major U.S. and international airlines began canceling flights to Israel, according to Flightaware. American Airlines and United stopped all flights to Tel Aviv Monday.
U.S. crude oil futures rebounded 3.6% to more than $86 a barrel, after surging more than 5% at one point Sunday night. Oil prices are still well below $90 per barrel, which they topped in late September before plunging nearly 9% last week on signs of weakening demand outweighing tightening supply. Leading U.S.-based oil producers, including Chevron and ExxonMobil, advanced Monday.
Chevron was notified by Israel's Ministry of Energy to close natural gas production at Tamar natural gas field, off the country's northern coast, for safety reasons, Bloomberg reported Monday. The energy giant is still supplying customers in Israel from the Leviathan platform, according to Bloomberg.
Defense stocks including Lockheed Martin, Northrop Grumman and General Dynamics all rallied.
Stocks With Israel Exposure
Israel-based stocks, regardless of industry, fell broadly Monday. Tel Aviv-based pharmaceutical Teva dropped 6.3% while security software firm CyberArk pared early losses, edging up 0.5% at the close.
Technology play Mobileye sank 5.3%. Intel, which owns Mobileye, edged down 0.4% Monday. INTC led premarket declines among Dow industrials stocks.
Internet security technology firm Check Point Software Technologies angled down 1.5%. Fellow software developer Nice fell 3.7%.
Elbit Systems, which manufactures defense electronics, fell 2.2% Monday. Meanwhile Gilat Satellite Networks dropped 3.9% and Eltek angled down 0.5% lower.
The iShares MSCI Israel ETF traded down 7% during market trade. BlueStar Israel Tech dropped 3%.
Please follow Kit Norton on X, formerly known as Twitter, @KitNorton for more coverage.
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