Investing
2025-11-01 15:01:38 The Government Shut Down. Here’s What History Says Will Happen in the Stock Market Next -->-->Key PointsThe government shutdown stems from a spending impasse, leading to the furloughing of 750,000 workers.Past shutdowns averaged 8 days, with the longest being 35 days in 2018-2019.TheS&P 500is up for five straight days, ignoring the government closure so far.It sounds nuts, but SoFi is giving new active invest users up to $1k in stock, see for yourself (Sponsor)-->-->The U.S. government shutdown, now in its third day since starting on October 1, stems from a partisan standoff over federal spending priorities. Republicans pushed for deeper cuts to non-defense programs, while Democrats demanded protections for social services and immigration reforms. With no resolution in sight, essential services continue, but about 750,000 federal workers face furloughs, delaying economic data releases like jobs reports. History shows these events average around 8 days, though the record-breaking 2018-2019 shutdown dragged on for 35 days, costing the economy billions. So far, markets have brushed it off: theS&P 500has risen each trading day since, including five straight gains. But history offers clear signals on what comes next. Shutdowns Aren’t New: A 50-Year RundownOver the past 50 years, the U.S. has seen 21 federal government shutdowns since the first in 1976 under President Gerald Ford. These lapses occur when Congress fails to pass funding bills by the fiscal year’s start on October 1. Early ones were brief, like the 11-day halt in 1976 over vetoed spending. Tensions peaked in the 1990s under divided government, with two multi-week shutdowns in late 1995 and early 1996 totaling 28 days combined.The 21st century brought more frequency amid polarization. From 2013 to 2019, shutdowns hit three times, including the 16-day one in 2013 over the Affordable Care Act and the marathon 35-day impasse in 2018-2019 tied to border wall funding. No major closures happened between 1996 and 2013, but recent years show rising risks. Each episode disrupts operations but rarely derails the economy long-term, as back pay and delayed work resume quickly.Loading stock data...History’s Bullish Hint for Stocks Post-ShutdownMarkets often rebound stronger after these disruptions. Data from the 21 shutdowns reveals the S&P 500 averaged nearly 13% returns in the 12 months following each end. Since 1980, the returns are even better, on average the S&P 500 gained 16.95%.During the events themselves, the index gained 0.3% on average, with gains in most cases. The 2018-2019 shutdown, despite its length, saw the S&P rise 10.3% while active, followed by a 24% surge over the next year.This pattern holds because shutdowns prove temporary, not structural shocks. Investors focus on earnings and growth, tuning out D.C. drama. With the current shutdown barely started, the S&P’s five-day winning streak — up 0.34% on day one, 0.06% on day two, and more since — mirrors that resilience. It suggests history could repeat, potentially fueling another leg higher if resolved soon.Why Stocks Keep Climbing Amid the NoiseEven with the shutdown, equities press on, driven by robust corporate momentum. Valuations look stretched — the S&P’s forward P/E ratio hovers near 22, above the long-term average of 17 — but gains persist. Key factors include cooling inflation, expected Federal Reserve rate cuts, and unrelenting artificial demand (AI) hype.Tech leaders dominate.Nvidia(NASDAQ:NVDA), the AI chip powerhouse, has surged 40% in 2025, pushing its market cap past $4.5 trillion. It’s locked in major deals, like a $100 billion investment inOpenAIannounced in September to build 10 gigawatts of AI data centers packed with millions of its GPUs. Nvidia also partnered withIntel(NASDAQ:INTC) on custom AI infrastructure, investing $5 billion in Intel stock to integrate NVLink tech. These moves solidify its grip on AI hardware, drawing billions in orders from cloud giants.Broader tailwinds also help: strong consumer spending, despite soft September job adds, and corporate buybacks. Energy and financials join the rally, betting on steady growth. TheDow Jones Industrial AverageandNasdaqindexes hit records too, showing broad participation.The Hidden Risks Lurking in the RallyBullish vibes aside, potential pitfalls are multiplying. Overextended valuations leave little margin for error; a prolonged shutdown could spike uncertainty, delaying hiring and capital expenditures. If it stretches past two weeks — and prediction markets say the adds of its happening are 40% — it might withhold key data, making Fed decisions hazier and rattling sentiment.AI’s promise also remains unproven. Hyped investments — hundreds of billions of dollars have poured into data centers and chips — have yielded scant returns so far. Although Nvidia’s deals dazzle, monetizing superintelligence is years off, with regulatory scrutiny rising on energy use and market dominance. Broader worries include tariff threats from recent policy shifts and softening private payrolls, hinting at economic wobbles. A debt ceiling fight could follow, amplifying volatility.Key TakeawayIrrational exuberance can endure far longer than expected, and forces like AI innovation and rate relief propel stocks upward. The market could climb much higher in the near term, shrugging off the shutdown as just another blip. Yet in this frothy setup, safeguarding against downside risk makes sense — history favors the bulls, but surprises happen.Want Up To $1,000? SoFi Is Giving New Active Invest Users up to $1k in StockLooking to grow your money but unsure where to begin? SoFi Active Invest is offering a limited-time promotion—open an account, fund it with $50 or more, and you could receive up to $1,000 in complimentary stock for Active Invest accounts.From $0 commission trading to fractional shares and automated investing, this app is designed to simplify investing for everyone, whether you’re just starting or already experienced. Its easy to sign up and secure your bonus.(sponsor)DISCLOSURE:INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUEBrokerage and Active investing products offered through SoFi Securities LLC, member FINRA(www.finra.org)/SIPC(www.sipc.org).Advisory services are offered by SoFi Wealth LLC, an SEC-registered investment adviser. Information about SoFi Wealth’s advisory operations, services, and fees is set forth in SoFi Wealth’s current Form ADV Part 2 (Brochure), a copy of which is available upon request and at www.adviserinfo.sec.gov.Probability of Member receiving $1,000 is a probability of 0.026%; If you don’t make a selection in 30 days, you’ll no longer qualify for the promo. Customer must fund their account with a minimum of $50.00 to qualify.Other fees, such as exchange fees, may apply. Please view our fee disclosure to view a full listing of fees.Investing in alternative investments and/or strategies may not be suitable for all investors and involves unique risks, including the risk of loss. An investor should consider their individual circumstances and any investment information, such as a prospectus, prior to investing. Interval Funds are illiquid instruments, the ability to trade on your timeline may be restricted. Brokerage and Active investing products offered through SoFi Securities LLC, Member FINRA(www.finra.org) /SIPC(www.sipc.org).There are limitations with fractional shares to consider before investing. During market hours fractional share orders are transmitted immediately in the order received. There may be system delays from receipt of your order until execution and market conditions may adversely impact execution prices. Outside of market hours orders are received on a not held basis and will be aggregated for each security then executed in the morning trade window of the next business day at market open. Share will be delivered at an average price received for executing the securities through a single batched order. Fractional shares may not be transferred to another firm. Fractional shares will be sold when a transfer or closure request is initiated. Please consider that selling securities is a taxable event.Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire investment Before trading options please review the Characteristics and Risks of Standardized Options [HYPERLINK: https://www.theocc.com/getmedia/a151a9ae-d784-4a15-bdeb-23a029f50b70/riskstoc.pdfInvesting in an Initial Public Offering (IPO) involves substantial risk, including the risk of loss. Further, there are a variety of risk factors to consider when investing in an IPO, including but not limited to, unproven management, significant debt, and lack of operating history. For a comprehensive discussion of these risks please refer to SoFi Securities’ IPO Risk Disclosure Statement [HYPERLINK https://www.sofi.com/iporisk/]. This should not be considered a recommendation to participate in IPOs and investors should carefully read the offering prospectus to determine whether an offering is consistent with their investment objectives, risk tolerance, and financial situation. New offerings generally have high demand and there are a limited number of shares available for distribution to participants. Many customers may not be allocated shares and share allocations may be significantly smaller than the shares requested in the customer’s initial offer (Indication of Interest). For more information on the allocation process please visit IPO Allocation [HYPERLINK https://support.sofi.com/hc/en-us/articles/360058602892-How-does-SoFi-allocate-IPO-shares].
Top-rated Choice