Israel’s October 27, 2026 Knesset election serves as the central driver for this market, functioning as a referendum on Benjamin Netanyahu’s continued tenure as prime minister after completing a full term. Recent polls show his Likud-led bloc averaging roughly 51–55 seats against a comparable 49–54 for the opposition alliance anchored by Gadi Eisenkot’s Yashar party, with neither side consistently reaching the 61-seat threshold for a majority. The race has tightened in recent weeks amid debates over accountability for the October 7, 2023 attacks, security developments, and Netanyahu’s efforts to consolidate right-wing and ultra-Orthodox support while pressuring smaller parties near the electoral threshold. A fragmented result could produce extended coalition talks or a caretaker government, leaving Netanyahu in office for months beyond the vote, whereas an opposition-led majority would accelerate his departure.