Global markets rallied on Monday amid renewed optimism that the 40-day U.S. government shutdown the longest in American history could soon end. The U.S. Senate advanced a bill to reopen the federal government, restoring pay for hundreds of thousands of sidelined workers and resuming stalled public services.
The development buoyed global equities: Nasdaq futures rose 1.2%, S&P 500 futures gained 0.7%, and European indexes followed suit with over 1% increases. Asian markets also reacted positively, with Japan’s Nikkei climbing 0.97% and MSCI’s Asia-Pacific index up 1%.
The shutdown has disrupted the U.S. economy, freezing government data, halting aid programs, and denting consumer confidence. Economists warn the prolonged closure could drag fourth-quarter GDP into negative territory if not resolved swiftly.
While the Senate’s progress lifted investor sentiment, analysts cautioned that markets remain headline-driven, with volatility likely until a final deal clears both houses of Congress and reaches President Donald Trump’s desk.
Market Analysts: Charu Chanana of Saxo said markets may see “short-term relief” but expect continued volatility until a concrete resolution emerges.
Economists: White House adviser Kevin Hassett warned of a potential negative GDP quarter if the shutdown persists.
Central Bank Watchers: The Federal Reserve remains cautious, with mixed signals on rate cuts amid economic uncertainty. Markets now price a 63% chance of a December rate cut.
Global Markets:
Europe: EUROSTOXX 50 and DAX futures rose over 1%.
Asia: China’s CSI300 dipped 0.24%, but Hong Kong’s Hang Seng added 0.6%.
Currencies: The dollar steadied after recent losses, trading at 99.66 on the dollar index.
Commodities: Brent crude rose 0.72% to $64.09 a barrel, and U.S. crude climbed 0.8% to $60.23.
If Congress passes the funding bill, federal agencies could reopen within days, offering relief to workers and markets alike. However, the broader economic impact of the shutdown from consumer sentiment dips to delayed data may linger.
Investors are watching upcoming U.S. economic indicators and Fed statements for clarity on monetary policy, while global markets brace for further swings tied to Washington’s political maneuvering.
With information from Reuters.
