Stock market surges following govt. shutdown negotiations
In this DML Report…
A bipartisan agreement reached Sunday evening has ended the 40-day U.S. government shutdown, the longest in history, by funding operations through January. The deal reverses federal worker firings, restores food-stamp funding, guarantees a vote on healthcare subsidies, and provides back pay to furloughed employees. It also lifts flight caps for airlines and releases backlog economic data, including the September jobs report critical for the Federal Reserve's December rate decision. Beijing's one-year suspension of special port fees on U.S. vessels, matching a U.S. pause on levies against Chinese ships, further eased trade tensions.
Stock markets surged in response, with the Nasdaq rising 1.7 percent, the S&P 500 climbing 1.1 percent, and the Dow adding 240 points on Monday. Chipmakers led gains, including Micron and TSMC, alongside Magnificent Seven stocks like Alphabet and Tesla. Treasury yields rose, gold futures increased, the dollar strengthened against the yen while holding steady against the euro and pound, and oil and Bitcoin prices edged higher.
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Global markets followed suit, with Hong Kong and Frankfurt each up 1.7 percent. The shutdown resolution tempered investor concerns over its financial impacts, such as halted government services and air travel disruptions ahead of Thanksgiving, while alleviating lingering worries about overextended tech valuations and potential AI bubble risks following last week's selloff.