Lawmakers are moving closer to a deal to end the longest government shutdown in history
by Andre Janse van Vuuren and Kwaku Gyasi
Stocks rallied and bonds fell as optimism that US lawmakers are moving closer to a deal to end the longest government shutdown in history spurred demand for risky assets.
S&P 500 futures rose 1% after a group of Senate Democrats broke with their party on a procedural measure to help Republicans advance a funding bill. Nasdaq 100 contracts gained 1.5% after the underlying index suffered its worst week since April. Nvidia Corp. led gains among the Magnificent Seven tech stocks in premarket trading, rising more than 3%.
Monday’s optimistic tone offered relief after a volatile week, when worries over stretched valuations fueled a sharp selloff in technology stocks. Ending the shutdown would give investors greater clarity on key economic data such as jobs and inflation, helping to lift the fog around the outlook for interest rates.
“Markets are taking very positively to the news of the potential resolution of the US shutdown,” said Marija Veitmane, head of equity research at State Street Global Markets. “We were very constructive on the market anyway and we saw last week’s sell-off as a little bit of a buying opportunity.”
The risk-on mood spread across markets, lifting oil, metals and Bitcoin. Europe’s Stoxx 600 was on track for its biggest gain since June. US Treasuries fell across the curve, pushing the 10-year yield up three basis points to 4.13%. Gold also advanced on prospects of a Federal Reserve rate cut next month.
How soon the shutdown will end remains uncertain. The Senate has yet to schedule a final vote, while the measure must also pass the House before reaching President Donald Trump for his signature.
“It’s only the opening act in what could still be a drawn-out political drama, but investors are seizing on any sign of progress,” said Ipek Ozkardeskaya, a senior analyst at Swissquote. “They need to understand where the US economy stands, where inflation and jobs are headed and what the Fed should do next.”
Despite the buoyant sentiment, some investors remain wary that volatility could linger amid falling consumer confidence, jitters in debt markets and ongoing questions over tech valuations. The near-term resumption of economic data releases may also reveal a less rosy picture than expected.
“What I’m really watching at the moment is the data for jobs and the risk of negative newsflow on that front,” said Fabien Benchetrit, head of target allocation for France and southern Europe at BNP Paribas Asset Management. “The second major risk moving forward is that the massive capex deployed on AI don’t deliver the expected boost in sales and earnings.”
Corporate News:
- Robinhood Markets Inc. rises 4% in premarket trading after Chief Executive Officer Vlad Tenev told the Financial Times that the platform plans to give amateur investors access to private artificial-intelligence companies.
- Diageo Plc named Dave Lewis, the former head of supermarket chain Tesco Plc, its new chief executive officer as the maker of Guinness stout and Johnnie Walker seeks to reboot after a period turmoil.
- Nvidia Corp. Chief Executive Officer Jensen Huang said he had asked Taiwan Semiconductor Manufacturing Co. for more chip supplies as artificial intelligence demand remained strong. TSMC also reported slowing growth in its revenue in October, potentially another indication that AI demand was moderating as the market turns frothy.
- Permira is nearing an agreement to acquire JTC Plc, the London-listed provider of fund solutions and corporate services, according to people familiar with the matter.
Some of the main moves in markets:
Stocks
- The Stoxx Europe 600 rose 1.4% as of 10:37 a.m. London time
- S&P 500 futures rose 1%
- Nasdaq 100 futures rose 1.5%
- Futures on the Dow Jones Industrial Average rose 0.4%
- The MSCI Asia Pacific Index rose 0.8%
- The MSCI Emerging Markets Index rose 1.2%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.1563
- The Japanese yen fell 0.5% to 154.14 per dollar
- The offshore yuan was little changed at 7.1236 per dollar
- The British pound was little changed at $1.3163
Cryptocurrencies
- Bitcoin rose 1.4% to $106,007.36
- Ether rose 0.7% to $3,604.78
Bonds
- The yield on 10-year Treasuries advanced three basis points to 4.13%
- Germany’s 10-year yield was little changed at 2.67%
- Britain’s 10-year yield was little changed at 4.46%
Commodities
- Brent crude rose 0.6% to $64.04 a barrel
- Spot gold rose 2% to $4,080.27 an ounce
This story was produced with the assistance of Bloomberg Automation.
Copyright Bloomberg News
