Local Panic or Global Attention? Filtered Internet Searches and Tel Aviv Stock Exchange Performance during the Israel–Hamas War.

This study investigates how conflict-related public attention, measured through Google Trends search data, shaped equity market dynamics in Israel during the 2023–2025 Israel–Hamas war. Search activity is disaggregated along two dimensions, the language of the query (English vs. Hebrew) and the geographic origin of the search (worldwide vs. domestic), producing eight attention indicators constructed from the terms "War in Israel" and "Hamas". The analysis employs an EGARCH(1,1) framework to capture asymmetric volatility responses and Granger causality tests to assess the predictive content of search-based attention at varying time horizons. The results reveal a clear linguistic asymmetry in how conflict-related information reaches asset prices. Hebrew-language searches exert a statistically significant negative contemporaneous effect on TA-35 returns, consistent with the rapid pricing of localized anxiety among domestic investors. English-language searches, by contrast, produce no significant same-week market response but carry robust predictive power at a two-week horizon, particularly domestic English searches for "War in Israel", which reject the null hypothesis of no Granger causality at the 1% level. In every specification, causality runs strictly from public attention to market returns, with no evidence of the reverse. A robustness check based on PCA-derived composite indices confirms both findings: the contemporaneous Hebrew war-specific effect and the lagged English predictive effect survive the compression of each linguistic channel into a single index. These findings suggest that the same conflict generates two distinct information transmission paths, one fast and local, driven by immediate threat perception, and one slow and global, reflecting the gradual accumulation of geopolitical awareness among internationally oriented investors. The results highlight that what moves markets during geopolitical crises is not simply the volume of public attention, but its linguistic and geographic origin.