Israel’s October 27, 2026, legislative election produced a fragmented Knesset, with Netanyahu-aligned parties holding 53 seats, Eisenkot-led opposition parties at 48, and Arab lists securing a record 19. No bloc reached the 61-seat majority required for government formation, leaving President Herzog’s mandate with Eisenkot and coalition negotiations stalled over issues including Arab-party inclusion, ultra-Orthodox draft exemptions, and potential unity arrangements. Traders therefore price “no government formed” and “other” outcomes highest, reflecting the procedural timeline, historical precedent for prolonged talks or repeat elections, and the political costs of crossing pre-election red lines that currently block viable majorities.