The October 27, 2026, Knesset election serves as the central driver for this market, functioning as a referendum on Netanyahu’s leadership after the October 7, 2023 attacks and ensuing multi-front conflicts. Recent polls show Netanyahu’s Likud-led bloc and the main opposition grouping headed by Gadi Eisenkot running essentially even, with neither side consistently reaching the 61 seats required for a stable majority. Both camps remain short of a clear governing coalition in most surveys, raising the prospect of prolonged negotiations, a caretaker government, or a possible follow-up vote. Additional factors include ongoing coalition tensions within the right-wing bloc, legal proceedings against Netanyahu, and voter divisions over security accountability. Post-election coalition arithmetic and any rapid legislative moves to alter eligibility rules will determine the timeline for any leadership change.