Wall Street Rises After Senate Progress on Shutdown Deal

US equities surged on Monday after the Senate voted to advance a short-term deal to end the longest government shutdown in US history. The move provided temporary relief to investors but offered only limited political stability, with regulatory and economic data backlogs expected to persist for weeks.

The Dow Jones Industrial Average rose 240 points (0.5%), the S&P 500 gained 1%, and the Nasdaq Composite jumped 1.6%, erasing much of last week’s losses. The rally reflected optimism that the 41-day fiscal standoff, estimated to be costing the US economy billions each week, could soon be resolved.

Tech Rebound Leads Gains, Policy Uncertainty Lingers

The rebound was led by technology and AI-related stocks, which had experienced sharp corrections in previous sessions. Investors appeared to use the political relief as an opportunity to reenter high-growth sectors, despite ongoing concerns about stretched valuations and slowing economic momentum.

Health insurers, including Cigna and Humana, traded lower as uncertainty over healthcare policy persisted. The Senate deal failed to secure a long-term extension of Affordable Care Act (ACA) tax credits set to expire at year-end—a key Democratic priority—keeping volatility high in healthcare and insurance markets.

Adding to investor caution, the Supreme Court is reviewing President Trump’s tariffs, injecting further regulatory risk into global trade and supply chains.

Data Drought and Regulatory Delays Challenge Businesses

The shutdown’s most immediate impact has been a prolonged “data drought” and the suspension of critical government operations. The halt in key economic reports, including CPI and Non-Farm Payrolls, has forced investors and policymakers—including the Federal Reserve—to make decisions with limited visibility. The Fed, which has cut rates by 25 basis points in its last two meetings, is set to issue its next rate decision early next month.

The shutdown also disrupted capital markets, delaying IPOs and mergers and acquisitions due to closed regulatory agencies. Small businesses were hit especially hard as the Small Business Administration (SBA) was unable to issue federally guaranteed loans, cutting off hundreds of millions in daily financing. Meanwhile, government contractors face severe cash flow issues, raising risks of furloughs and layoffs across an estimated 5.2 million private-sector contract workers.

Despite the uncertainty, markets remain resilient. Year-to-date, the S&P 500 is up 14%, the Dow Jones 10%, and the Nasdaq 19%, signaling continued investor confidence despite historic fiscal turbulence.