Israeli markets took off on Sunday, riding a wave of optimism after U.S. military forces obliterated several of Iran’s nuclear facilities. The strikes, seen as a decisive move to curb Tehran’s atomic ambitions, sent local stock indices soaring.

The Tel Aviv 125 surged 1.8%, marking a weekly climb of nearly 8%. Not far behind, the TA-35 gained 1.5%. That capped off five straight days of gains — a rare streak that reflected growing investor confidence amid escalating regional tension.

Shockwaves from the bunker-busters

Last week’s Israeli strikes on Iranian targets already had markets buzzing. But the game changed Saturday night, when Washington joined the fray. U.S. President Donald Trump confirmed that American forces used bunker-busting bombs to wipe out Iran’s key nuclear infrastructure.

That announcement landed like a thunderclap.

Investors responded immediately, pouring money into Tel Aviv equities. The assumption? Iran’s ability to wage nuclear war just got severely crippled.

And that belief carried weight.

“Destruction of Iran’s nuclear capability is obviously good news — from a security standpoint, but also for the economy,” said Ronen Menachem, chief markets economist at Mizrahi Tefahot.

Five days, five wins

The gains didn’t start Sunday. In fact, they were building all week.

Monday through Thursday, Israel’s stock market rose steadily. Friday? It accelerated. Investors were already pricing in Israel’s earlier strikes against Iran, which targeted ballistic missile sites and top commanders.

Here’s how the key Israeli indexes performed during the week:

Day	TA-125 Change (%)	TA-35 Change (%)
Monday	+0.7	+0.5
Tuesday	+1.2	+1.0
Wednesday	+1.6	+1.3
Thursday	+1.8	+1.5
Friday	+2.4	+2.2

It wasn’t just about missiles and bombs. Investors also began pricing in broader strategic implications.

Ripple effect across the Gulf

Interestingly, it wasn’t only Israel’s markets getting a boost. Other Middle Eastern exchanges reacted too — perhaps less dramatically, but still significantly.

Kuwait’s Boursa Premier Market Index edged up nearly 1%, hitting 8,650.6 points. Oman’s MSX30 Index climbed 0.5%, reaching 4,525.31.

These gains came despite the obvious risks. Iran isn’t known for turning the other cheek — and true to form, it retaliated quickly. Tehran launched dozens of missiles at Tel Aviv on Sunday, causing property damage and injuring civilians.

Still, markets held up.

Strategic bets, longer vision

While short-term movements grabbed headlines, some investors saw bigger plays at work. With Iran momentarily weakened, there’s speculation that deeper regional alignments could emerge — especially between Saudi Arabia and the U.S.

“From a long-term perspective, this might even open doors to broader cooperation,” said Menachem.

Here’s what investors are betting on:

Regional stability improves as Iran’s military capability takes a hit
U.S.-Israel ties tighten further, boosting confidence in domestic markets
Oil supply disruptions remain minimal — for now
Possible acceleration in Saudi-American-Israeli economic collaborations

But of course, it’s complicated. Iran isn’t done. Its threats of more retaliation are real. And any miscalculation could drag more countries into the fire.

Tel Aviv’s resilience under fire

Despite missile strikes on Sunday that rattled the city and sent people running for shelters, the Tel Aviv Stock Exchange held firm. That kind of resilience isn’t typical — even for a region accustomed to geopolitical shocks.

Market watchers say this reflects a strange kind of confidence. It’s not that the danger has passed. It’s that the worst-case scenario — a nuclear Iran — may have just been kicked further down the road.

Not everyone’s convinced though.

One broker in Ramat Gan said his clients were “buying like it’s 1999,” but warned that “things could go sideways real fast if Iran escalates.”

What’s next?

No one can say for sure. The U.S. strikes were a massive escalation — even by Middle East standards. But so far, investors seem to believe they’ve made the region safer, not riskier.

Menachem, like many analysts, is watching for the next 72 hours. If there are no further surprises, he believes the markets could settle into a new, bullish rhythm.

Still, war is unpredictable.

So, for now, investors are flying blind — with optimism as their compass.