Markets Jump as Shutdown Resolution Nears, Tech Rebounds Strongly

Markets kicked off the week on a high note, buoyed by growing confidence that a bipartisan Senate deal will soon end the record 41-day U.S. government shutdown. Risk assets rallied broadly, led by a sharp rebound in technology stocks, while safe havens like Treasuries and the dollar lost ground. Investors welcomed the potential return of economic data, which could guide the Federal Reserve’s next moves, especially with the December rate decision in sight. Major indexes snapped last week’s losses, with the Nasdaq leading on strength in AI names, and gold surged amid ongoing uncertainty.

Key Headlines & Market Movers:

• Shutdown Deal in Sight Sparks Relief Rally: Markets rallied sharply on signs that a deal to reopen the government is imminent, with the Senate advancing a bipartisan measure late Sunday. Though final passage is pending in both chambers, investor sentiment improved meaningfully, viewing it as a step toward restoring visibility on fiscal and monetary policy. The S&P 500 jumped 1.5% and the Nasdaq surged over 2%, driven by a bounce in risk appetite after last week’s losses. Reopening the government would allow long-delayed economic reports, particularly on employment and inflation, to resume, helping shape the Fed’s next rate decision.

AI and Tech Stocks Lead Rebound: After last week’s sharp selloff, tech names roared back, led by AI-related companies. Palantir gained nearly 9%, and chipmakers like Nvidia and AMD posted strong gains as investors re-engaged with growth themes. The tech megacap index rose about 3%, reflecting renewed conviction in AI’s long-term potential despite recent valuation concerns. Analysts continue to point to solid earnings growth and neutral investor positioning as fuel for further upside, even as some call for broader leadership beyond tech.

• Fed Rate Cut Debate Reignited: With the potential return of macro data, Fed watchers are recalibrating expectations. Some officials still advocate caution, citing early 2026 economic rebound hopes, while others point to soft labor conditions and cooling inflation as rationale for a December cut. Markets are now pricing a roughly 60% chance of a 25bps cut next month. However, Fed commentary this week is expected to repeat familiar hawk-dove divides, offering little new direction until data resumes.

Gold Surges, Bonds Mixed Ahead of Auctions and Veterans Day: Gold jumped nearly 3% to over $4,100/oz, reflecting lingering demand for hedges amid fiscal and political uncertainty. Treasuries were mixed: short-dated yields rose slightly while longer maturities held steady ahead of this week’s $125 billion in auctions. The bond market will close Tuesday for Veterans Day, limiting activity. Meanwhile, the dollar underperformed major peers as the risk-on mood took hold.

S&P 500 Sector Performance

Looking Ahead

While markets welcomed signs of a shutdown resolution, passage still requires full congressional approval and a signature from President Trump. Should the deal materialize, attention will quickly shift to the return of economic data, especially September’s jobs report, which may arrive within days and help shape December’s Fed decision. Expect volatility as investors digest backlogged data and weigh whether recent momentum in equities can hold, especially in tech. The return of macro fundamentals could also sharpen focus on inflation, consumer strength, and the durability of corporate earnings heading into 2026.

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