URGENT UPDATE: Wall Street’s main indexes are surging amidst new signs of progress in Washington, D.C., toward ending a record government shutdown that has stalled critical economic data releases. Just moments ago, senators advanced a bill from the House of Representatives aimed at funding the government until January 30, 2023. If approved, this measure requires House ratification and President Donald Trump‘s signature, potentially dragging the resolution process over several days.
Market analysts are reacting positively. “If we do get an end to the shutdown, it would be a near-term positive,” said Mohit Kumar, an economist at Jefferies. “It would also open the path for data releases, allowing for timely collection of information for the employment report in early December.” This sentiment is fueling optimism among investors, leading to a significant uptick in tech stocks.
In early trading on Monday, the Dow Jones Industrial Average rose by 283.95 points, or 0.60 percent, reaching 47,271.05. The S&P 500 gained 81.91 points, or 1.22 percent, climbing to 6,810.71, while the Nasdaq Composite surged 451.61 points, or 1.96 percent, hitting 23,456.15. Tech giants like Nvidia jumped 3.4 percent, with Alphabet and Amazon.com each climbing 3.0 percent.
The CBOE Volatility Index eased by 1.12 points to 17.96, retreating from a three-week high reached on Friday. Small-cap stocks also showed strength, with the Russell 2000 increasing by 1.4 percent and the semiconductor sector climbing 3.1 percent.
Airlines are particularly benefiting from the renewed optimism, with shares of United Airlines and Delta Airlines rising 2.5 percent each. The prolonged shutdown has severely impacted air traffic control staffing, but hopes for a resolution are boosting market confidence.
Kevin Hassett, White House economic adviser, warned in a recent interview that fourth-quarter U.S. economic growth could turn negative if the shutdown persists. Meanwhile, betting site Polymarket indicates an 85 percent chance that the shutdown will end this week.
The shutdown, now the longest in U.S. history, has created significant data gaps for both the Federal Reserve and the markets, which are now relying on private data that offers a mixed view of the economy. This uncertainty has led to volatility, particularly in tech stocks, which faced a sell-off last week, marking the Nasdaq’s worst performance in over seven months.
As the third-quarter earnings season comes to a close, data shows that 83 percent of the 446 S&P 500 companies reporting thus far have exceeded earnings expectations, according to LSEG data. Notably, Venture Global shares spiked by 10 percent following a profitable third quarter.
However, not all sectors are thriving. Shares of health insurers plummeted after the Senate reached an agreement to end the federal shutdown without extending Affordable Care Act subsidies, pushing the vote on this issue to December. Centene fell 9.5 percent, while Humana and Elevance Health dropped 2.0 percent each. Additionally, Metsera slumped 15.6 percent after Pfizer won a $10 billion bidding war for the company.
As trading continues, advancing issues outnumber decliners by a ratio of 2.44-to-1 on the NYSE and 2.84-to-1 on the Nasdaq. The S&P 500 recorded 15 new 52-week highs and 3 new lows, while the Nasdaq Composite saw 57 new highs and 45 new lows.
Stay tuned for more updates as this situation develops. The resolution of the government shutdown may shift market dynamics significantly in the coming days.
