U.S. stock futures pointed to a strongly higher open on Monday, signaling that investors are ready to buy back into equities after last week’s losses, as optimism grows that the record-long U.S. government shutdown could soon be over.
Momentum picked up after the Senate voted 60-40 to advance a temporary funding measure aimed at reopening federal agencies and restoring pay for furloughed workers. The bill, which still needs final approval from the Republican-controlled House of Representatives, received backing from eight Democratic senators in exchange for a future vote on extending enhanced Obamacare tax credits.
While procedural delays could still slow the bill’s passage, markets welcomed the vote as a major step toward breaking the impasse that has weighed on business and government operations for over a month.
Although Wall Street had remained relatively resilient through the shutdown, the prospect of an imminent resolution has provided a clear catalyst for Monday’s rebound, particularly as investors look for direction following concerns about stretched valuations in the technology sector.
The reopening of the government would also mean the release of key economic data that has been held back in recent weeks, restoring much-needed visibility for both traders and policymakers.
“A key impact on the markets of the impasse, beyond the hit to the wider economy, has been the lack of data as key releases on areas like the jobs market have been delayed,” said Russ Mould, Investment Director at AJ Bell. “This has created a considerable dose of the uncertainty which markets famously hate and it is also hampering the ability of the Federal Reserve to make informed decisions on interest rates. In this context, it’s not a surprise to see investors react positively to signs of progress.”
On Friday, stocks staged a late-session rebound following steep early losses, with the Dow Jones Industrial Average and S&P 500 both closing slightly higher, while the Nasdaq Composite slipped 0.2% to 23,004.54. The tech-heavy index still ended the week down 3.0%, its worst performance since April, while the S&P 500 and Dow lost 1.7% and 1.2%, respectively.
The modest recovery coincided with reports that Senate Majority Leader Chuck Schumer had offered Democratic support for a short-term funding bill to reopen the government in exchange for Republican cooperation on healthcare-related provisions.
Earlier in the week, investor sentiment had been rattled by mounting valuation anxiety, particularly around AI-related stocks. Palantir Technologies (NYSE: PLTR) fell sharply despite strong quarterly results, while market heavyweights Goldman Sachs (NYSE: GS) CEO David Solomon and Morgan Stanley (NYSE: MS) CEO Ted Pick both warned that equities could face a significant correction over the next one to two years.
Adding to the cautious mood, a University of Michigan survey showed consumer sentiment plunging to 50.3 in November, far below expectations and the lowest level since June 2022. Survey Director Joanne Hsu said the drop reflected growing concern among consumers about the economic toll of the prolonged shutdown.
Still, certain sectors managed to shine. Computer hardware stocks rallied 3.2% after an early slump, while gold miners climbed 2.3% as gold prices surged past $4,000 an ounce. Gains were also seen across natural gas, airline, and commercial real estate stocks, offsetting weakness in semiconductor and networking names.
With optimism over the shutdown’s resolution and the return of delayed economic data, analysts believe the coming week could mark a short-term turning point for equities — especially if easing uncertainty helps restore investor confidence heading into year-end.
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