Good morning,
Following a week in which investor anxiety seemed disproportionate to the market’s modest pullback, equities are bouncing back in early trading this morning. For the week, the S&P 500, Nasdaq, and Russell 2000 fell -1.61%, -3.03%, and -1.86% respectively. As of 8 a.m. ET this morning, futures for the same indices are up +0.90%, +1.43%, and +1.25%.
Over the weekend, there was unexpected progress toward resolving the government shutdown. It appears that travel concerns ahead of Thanksgiving may have helped break the stalemate—after all, few members of Congress want to face canceled flights or long TSA lines over the holidays.
That said, this is not a long-term fix. The Senate’s apparent deal would only fund a few departments (and Congress itself) beyond January, meaning we could easily be back in the same place by early 2026. So, while the can wasn’t exactly kicked down the road, it may have been gently nudged.
The agreement still needs House approval—likely Tuesday or Wednesday—so we may yet see more market swings before things settle.
This was expected to be an inflation-data week (CPI Thursday, PPI Friday), but the odds are low that government statisticians will have the machinery back online in time, even if the shutdown ends mid-week. Regardless, the removal of shutdown risk helps clear the fog for the Fed and alleviates market worries about the consumer heading into the holidays.
Political theatrics could still resurface in the coming days, but it seems reasonable to assume that the House will follow the Senate’s lead—nudge the can into January, get out of Dodge, and start their extended recess.
Be well,
Mike