The image of the seventh night of Passover, 2026, stands strong in our collective Israeli memories. Standing on the brink of our modern-day Red Sea climax, we awaited a cataclysmic event of similarly epic proportions.
Our contemporary tormentor – the radical Islamic regime of Iran – took the place of ancient Egypt. The Khamenei father-son combination played the role of the ancient Pharoah in a most appropriate manner. What began as a military campaign to root out the evil of Iran on Shabbat Zachor on the Jewish calendar reached its apex on the anniversary of the splitting of the Red Sea and our ultimate victory over the evil of ancient Egypt. All we needed was for fire and brimstone to rain down from US planes and warships on Iranian power plants and bridges to deliver the “knock-out punch” to the modern-day tormentor of the Jewish people some 3,500 years after our original nemesis met its demise.
Certainly, we were at least somewhat disappointed that the parallel story met an abrupt ending, or at least an unexpected diversion. When we woke up on the seventh morning of Passover, the world had not changed for the better – at least not as we had hoped or expected the night before. The temporary ceasefire that had been declared – seemingly unilaterally by President Donald Trump – left us with more unanswered questions and very little certainty.
The absence of a decisive victory – or at least the massive US attacks on Iran that could have eventually led to a clear triumph – was unfulfilling and even unsettling. Where would the ceasefire leave Israel and its resilient but strained economy? Wasn’t this just an unfortunate delay to the inevitable next round against Iran and its terrorist proxies? Would the ceasefire even last the initial two weeks before we would have to return to our shelters?
Indefinite and uncertain
As we fast-forward three weeks later, the “temporary” ceasefire can still be characterized as indefinite. Life has slowly crept back to normal for the Israeli economy, although nobody knows how long this interim stage will last or what will come next. Israeli public companies, seeking to project where this all leads to, and the expected impact of the current situation on their operations or on the Israeli economy on a macro level, are seemingly faced with great uncertainty. The current geopolitical ambiguity has left CEOs and CFOs at a loss to predict what will be next week, let alone for all of the second fiscal quarter, or the remainder of 2026.
The irony to the entire current situation is, however, that as Israelis, can’t we identify with uncertainty? We are the people who live with constant uncertainty and thrive with it! We are living in a country where an extreme degree of political and military instability go hand in hand with a thriving economy. Whether as a believing people we attribute this to the blessings that come along with the challenges of the redemptive process, or, for agnostics, to some other quirk of Middle East irrationality, in either case the trend is undeniable.
While not accustomed to our uncertain existence in this part of the world, the US capital markets, in which many of our Israeli public companies participate as important players, are seemingly coming to terms with the current uncertain holding pattern. The daily updates as to the on-again, off-again negotiations between the US and Iran do not move the markets as much as they initially did. Even Trump’s indication that the blockade of the Straits of Hormuz by the US Navy will remain in place indefinitely – seemingly adversely impacting world energy supply and prices – has not irritated Wall Street as much as when the blockade began.
Could it be that the US (and Israeli) capital markets are becoming immune to the holding pattern between the US and Iran? Or, is there an underlying level of confidence that the US “holds all of the cards” (to borrow an expression used by President Trump) and will emerge with a satisfactory victory over Iran, with the complete elimination of the Iranian nuclear program?
It seems that the markets’ belief in the US staying power is the key factor. The US strategy currently appears to be to inflict as much pain as possible on the Iranian ayatollahs’ oil-driven economy, and to withstand the reciprocal pain to the US and world economies, and to expect that the Iranian regime will “blink” first. The US economy and markets, driven by the unprecedented strength of AI-centric giants, is clearly far stronger than the severely crippled Iranian economy, which cannot expect to persevere much longer without its primary source of capital – oil revenues from China and its other allies.
It is true that the Iranian regime has its distinctive jihadist mentality as a means to keep itself afloat – for now. However, with the proper degree of patience, the US will reap the rewards of its wise strategy. Whether it is through renewed domestic Iranian unrest and the potential toppling of the regime (a real possibility given the economic carnage in Iran), or capitulation by Iran to the US demands to hand over its enriched uranium and end future nuclear enrichment activities, it would be shocking to see Iran prevail in this mismatch of economic strength.
Decision makers in Israel on the macro level, and at Israeli public companies on a micro level, would be wise to internalize the message that US capital markets are sending via their recent imperviousness to daily developments in the US-Iranian stand-off. There is an unspoken confidence that the US economy and world economy are strong enough to withstand whatever pain the Iranian intransigence might inflict. One way or the other, the situation should be resolved reasonably favorably, with Iran’s nuclear program terminated for the foreseeable future. President Trump has been true to his word in refusing to back down from that demand. While the immediate future is still uncertain, the final outcome can be relied upon fairly confidently.
In the interim, Israeli companies can plan to continue to expect fairly strong US and Israeli capital markets in the near and mid-term future. After all, a few uncertainties should not deter a nation whose entire future existence has been in question often in our 78-year history. We are quite capable of “winging it,” and in this case anyway it seems reasonably clear in which direction this situation is headed. In drawing up operational plans, policy makers and companies should take note of the unbelievable rise in the Tel Aviv Stock Exchange the last couple of years, and the incredible strength of the shekel.
Even if we did not experience our own splitting of the sea some three weeks ago, a more subtle redemption from our tormentor has been evolving ever since. It just requires a little bit of patience (something we Israelis often lack) to arrive at our desired outcome, even if not a dramatic, decisive victory of biblical proportions.
The writer is a partner at Meitar Law Offices in Ramat Gan, Israel, where he has played a significant role in the US/Global Capital Markets group practice since his arrival in 2008.