THE END OF THE SHUTDOWN
Let’s start from the beginning. The Shutdown began on October 1st and has now lasted for more than 40 days. The reason? Congress’ inability to pass a new budget. In other words, the two sides—Republicans and Democrats—disagreed on key funding priorities for the government, and neither side backed down.
Until Sunday, when the Senate narrowly approved the first stage of a deal to finally “reopen” the government. The voting process lasted for hours, with the final “yes” coming from Republican Senator John Cornyn, who arrived in Washington at the very last moment to cast his vote.
The most notable part? Eight Democratic Senators “broke ranks” and voted in favor of the deal, reaching the required 60 votes. Among them were Tim Kaine, Catherine Cortez Masto, and Jeanne Shaheen, who explained that… there was simply no other option. “If we waited any longer, the shutdown would cause even more damage,” said independent Senator Angus King.
The deal provides funding until the end of January, reinstatement of all furloughed employees, full payment of federal workers’ salaries, and funding of SNAP (food assistance) through September. It also includes provisions for a bipartisan budgeting process and limits the use of “temporary resolutions” by the White House.
What it does NOT include is the extension of the Obamacare (ACA) tax credits—one of the Democrats’ main demands. These tax credits helped more than 20 million Americans lower their healthcare costs, and now they’re at risk of disappearing.
Nevertheless, Republicans pledged to hold a vote on this issue in December. The optimists say “at least the path is open.” The pessimists—like Bernie Sanders—call it “a completely meaningless gesture.”
Now the process moves to the House of Representatives, where Speaker Mike Johnson has already called members back to Washington to proceed with the voting. If it passes there as well, all that remains is President Trump’s signature for the shutdown to officially end.
MARKET REACTION
While all of this political bargaining was happening, Wall Street… was rallying! The major indices closed with strong gains, with the Nasdaq finishing at +2.27% and the S&P 500 at +1.54%.
Tech stocks—and especially AI-related companies—saw surprising gains, with Palantir closing at +8.8%, Micron at +6.4%, and AMD at +4.4%.
Dan Ives of Wedbush Securities commented: “It was an intense moment for technology, but the long-term outlook remains extremely positive. Optimism was boosted by the recent impressive financial results from AI companies and the surge in demand for high-tech infrastructure.”
It’s worth noting that historically, the market tends to move upward after major political deadlocks. According to Ryan Detrick, when Washington “gets back to work,” stocks rise on average 12.7% over the next year.
Posted Using INLEO
Finally! Hopefully, the rally spills over into crypto and begins the next leg of this bull season.