Recent coalition collapse in May 2026, triggered by ultra-Orthodox parties withdrawing support from Netanyahu’s government, advanced the legislative election to September or late October. Current polling averages show Netanyahu’s right-wing and religious bloc holding roughly 50-53 Knesset seats while the opposition bloc reaches 57-58, leaving both short of the 61-seat majority needed to form a government. Traders appear to price in the likelihood that post-election negotiations—potentially involving kingmaker parties such as Yisrael Beiteinu—will produce a workable coalition rather than prolonged deadlock requiring fresh elections. This assessment aligns with historical patterns in which fragmented results have still yielded majority governments through bloc realignments, supporting the 77.5% implied probability that the outcome will not resolve as a hung parliament.