U.S. Stock Futures Rise as Government Shutdown Averted

Late Sunday night, U.S. stock-index futures saw a significant surge after Congress narrowly avoided a government shutdown on Saturday.

Market Gains

Dow Jones Industrial Average futures (YM00, +0.58%) rallied approximately 200 points, or 0.6%. S&P 500 futures (ES00, +0.62%) and Nasdaq-100 futures (NQ00, +0.83%) also experienced gains.

Congress Approves Stopgap Spending Bill

On Saturday night, Congress successfully approved a bipartisan stopgap spending bill, resulting in the temporary prevention of a shutdown. However, this move puts House Speaker Kevin McCarthy’s job at risk. Republican Rep. Matt Gaetz of Florida has announced his intentions to remove McCarthy from his leadership position due to breaching agreements with hardline Republicans. McCarthy, responding confidently, said, “Bring it on.”

Relief in the Stock Market

Stephen Innes, the managing partner of SPI Asset Management, explained that with one obstacle in Q4 economic growth seemingly resolved temporarily, investors initially felt a sense of relief. He also stated that as policymakers postpone long-term decisions, yields may see a slight increase as the market shifts its focus from the potential negative impacts of a government shutdown to the hawkish Federal Reserve. Innes added that a budget resolution is more likely considering the proximity of the new deadline to the upcoming holiday season.

Challenging Month for Wall Street

Last week witnessed a challenging month’s end for Wall Street, with the S&P 500 (SPX) marking its worst monthly loss of the year, decreasing by nearly 5%. The Dow Jones Industrial Average (DJIA) and Nasdaq Composite (COMP) also concluded the month on a downward trajectory.