Recent Israeli election results on October 27 left Benjamin Netanyahu’s right-wing bloc with 53 Knesset seats, ahead of Gadi Eisenkot’s opposition grouping on 48 but short of the 61-seat majority needed to govern. Arab parties secured a record 19 seats, positioning them as potential kingmakers, yet most Jewish parties have pledged against including them in coalitions. Netanyahu remains caretaker prime minister during negotiations, retaining authority over security matters amid tensions with Iran. This deadlock, combined with his established record of navigating inconclusive votes and coalition talks, underpins trader consensus reflected in the market’s leading probabilities for his departure in mid-2027. Coalition formation deadlines, possible unity government talks, or a snap election within the next several months represent the main near-term variables that could shift timelines.