UPDATE: Wall Street’s major indexes surged in early trading today as optimism grows over a potential resolution to the historic government shutdown. Investors are reacting to recent progress in Washington, D.C., where senators advanced a critical funding bill that could reopen the government and release stalled economic data.
Just hours ago, the Senate voted to amend a House-passed bill to fund the government until January 30, 2023. If approved by the Senate, it will require the House’s endorsement and President Donald Trump’s signature, a process that could unfold over the coming days.
“If we do get an end to the shutdown, it would be a near-term positive… with positioning cleaner, we could see some dip buying,” said Mohit Kumar, an economist at Jefferies. “It would also open the path for data releases… we should start seeing initial claims data and there should be sufficient time to collect data for the employment report in early December.”
As optimism mounts, the Dow Jones Industrial Average rose 283.95 points, or 0.60%, reaching 47,271.05. The S&P 500 climbed 81.91 points, or 1.22%, to 6,810.71, and the Nasdaq Composite surged 451.61 points, or 1.96%, to 23,456.15. Most tech stocks saw significant gains, with Nvidia up 3.4%, while both Alphabet and Amazon.com added 3.0% each.
The small-cap Russell 2000 also gained 1.4%, and a broader semiconductor index rose 3.1%. Airlines are rising as well, with United Airlines and Delta Airlines adding 2.5% each amid hopes the shutdown will come to an end.
Economic adviser Kevin Hassett warned in a recent interview that continued shutdown could lead to negative economic growth for the fourth quarter. Betting platform Polymarket currently shows a remarkable 85% chance that the shutdown will end this week, reflecting growing investor confidence.
The ongoing shutdown has created a significant data gap, leaving the Federal Reserve and markets reliant on private data that presents a mixed economic picture. Despite a bull run in U.S. stocks this year, concerns over monetization within the tech sector led to a sell-off last week, marking the Nasdaq‘s worst performance in over seven months.
As the third-quarter earnings season nears its conclusion, 83% of the 446 S&P 500 companies that have reported have exceeded earnings expectations, according to data from LSEG. Notably, Venture Global stocks jumped 10% after the LNG exporter reported a profit for the third quarter.
However, health insurers faced declines after the Senate struck a deal to end the 40-day federal shutdown without extending Affordable Care Act subsidies, setting a vote for December. Centene fell 9.5%, while Humana and Elevance Health lost 2.0% each. In a significant market move, Metsera plummeted 15.6% following Pfizer’s successful $10 billion acquisition bid.
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 against 45 new lows.
With markets reacting to the potential end of the shutdown, all eyes will be on Washington as developments unfold. Stay tuned for real-time updates as this story progresses.
