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Norway’s sovereign wealth fund, the world’s largest, will exclude another six Israeli companies with connections to the West Bank and Gaza from its portfolio following an ethics review, it said on Monday.

The $2 trillion wealth fund did not name the companies it had decided to exclude. The announcement comes one week after the fund said it was selling its investments in 11 Israeli companies over concerns about affairs in the West Bank and Gaza.

The fund launched an urgent review earlier this month after reports that it had built a stake in an Israeli jet engine group that provides services to the Israel Defense Forces, including the maintenance of fighter jets.

“We are invested in companies that operate in a country at war, and conditions in the West Bank and Gaza have recently worsened. In response, we will further strengthen our due diligence,” the fund’s CEO Nicolai Tangen said in a statement last week.

As of August 14, the fund had some $1.86 billion invested in 38 companies listed in Israel, the fund’s operator Norges Bank Investment Management said, a reduction of 23 companies since June 30.

“More companies could be excluded,” Norwegian Finance Minister Jens Stoltenberg told reporters.

The fund said the names of the six companies in Monday’s announcement would be made public, along with specific reasons, once the divestments were completed. One possibility is that they include Israel’s five largest banks, which have been under review by the fund’s ethical watchdog.

Separately, the fund said it had also sold stakes in six other companies, following a decision last week to only hold stakes in Israeli companies that are part of the fund’s benchmark index.

Norway has seen a debate flare up about the fund’s investments in Israel, the West Bank, and Gaza ahead of elections on September 8, with some parties calling for the fund to divest from all Israeli companies, a step the government has ruled out.

Norway’s parliament in June rejected a proposal for the fund to divest from all companies with activities in the West Bank and Gaza. “This debate helps sharpen our practices,” said Stoltenberg.

The flags of (from top) Norway, South Africa, Palestine, Ireland, and Spain, are raised at an entrance of Ramallah city in the West Bank on May 28, 2024. (Zain JAAFAR / AFP)

Those pushing for divestment say only a complete withdrawal from investing in Israeli companies would protect the fund against possible ethical breaches. The sovereign wealth fund’s decisions follow Norway’s announcement last year that it would recognize a Palestinian state.

Stoltenberg said that, from now on, the fund’s ethics watchdog and its operator would have more frequent and faster exchanges of information to more rapidly identify problematic companies.

Ethical exclusions from the fund are based on recommendations from the fund’s watchdog, though the fund’s operator can also divest from companies if it assesses that a company poses too much of a risk to the fund, whether the risk is ethical or not.

“With more exchanges of information between the Council on Ethics and Norges Bank, it is possible that there could be more divestments of that kind in future,” said Stoltenberg.

Last Monday, the fund announced it was terminating contracts with all three external asset managers who handled some of its Israeli investments.

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Wall Street held near its record heights on Monday, ahead of a week likely to be dominated by updates from the head of the Federal Reserve and from some of the biggest U.S. retailers.

The S&P 500 barely budged and fell by less than 0.1%, coming off its first loss after setting an all-time high in three consecutive days. The Dow Jones Industrial Average slipped 33 points, or 0.1%, and the Nasdaq composite edged up by less than 0.1%.

Novo Nordisk’s stock that trades in the United States rose 3.7% after the Danish company said U.S. regulators approved its Wegovy drug as part of a treatment for a liver disease found in many overweight and obese people.

Soho House, a membership club with locations around the world, jumped 14.9% after announcing a deal in which an investor group led by hotel-operator MCR would pay $9 in cash for its shares.

Several of the country’s largest retailers, meanwhile, were mixed ahead of their profit reports that are scheduled for later in the week. Home Depot, which will report on Tuesday, slipped 1.2%.

Target rose 1.9% ahead of its report on Wednesday, and Walmart added 0.7% before its report on Thursday.

They, along with companies like Estee Lauder and Ross Stores, could offer a look at how different types of U.S. households are holding up when the job market seems to have morphed into one where relatively few workers are getting fired but also hired.

Just like a small group of wealthy households are separating from the rest of the country, a handful of Big Tech companies are dominating the U.S. stock market, in part because of a boom in spending around artificial-intelligence technology.

This separation of “haves” and “have nots” in the stock market could be increasing the risk, with many companies potentially facing trouble if the economy stagnates and inflation is high, according to Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management. The danger is that investors could look at how much the broad S&P 500 index has surged since its low point in April and “extrapolate the success of the few to the gains of the many.”

On Friday, the focus will swing to Jackson Hole, Wyo., which has been the home in past years of many big policy announcements from the Federal Reserve. There, Fed Chair Jerome Powell will give a speech, and investors are hoping to hear how his mind has changed about interest rates since he said last month that he wanted to wait longer before cutting rates.

The fear at that time was that President Trump’s tariffs could push inflation higher. Now, though, the bigger fear could be the slowing U.S. job market following a disappointingly weak report on employment that arrived just after the Fed’s last meeting.

The Fed’s twin jobs are to keep the job market healthy while also maintaining a lid on inflation, and helping one can often hurt the other in the short term. Lower rates can boost the economy by making it cheaper for U.S. households and businesses to borrow to buy houses, cars or equipment, for example, but they also risk worsening inflation.

Inflation updates since the Fed’s last meeting have come in mixed, further muddying the picture, but traders are nevertheless strongly expecting the Fed to cut its main interest rate for the first time this year at its next meeting in September. The hope is that Powell could give a nod to that.

Expectations for cuts to interest rates have pulled Treasury yields lower lately, and they largely remained there on Monday.

The yield on the 10-year Treasury held at 4.33%, where it was late Friday.

On Wall Street, the S&P 500 edged down 0.65 to 6,449.15. The Dow slipped 34.30 to 44,911.82, and the Nasdaq composite added 6.80 to 21,629.77.

In stock markets abroad, indexes mostly fell in Europe in their first trading after Trump’s inconclusive summit meeting with Russian President Vladimir Putin on Friday about the war in Ukraine. Trump met with Ukrainian President Volodymyr Zelensky on Monday.

In Asia, indexes were mixed, with Japan’s Nikkei 225 rising 0.8% and South Korea’s Kospi falling 1.5%.

Choe writes for the Associated Press.