Recently, the risk of a government shutdown in the United States has risen again: federal funding will expire on September 30, and if Congress fails to pass a new appropriations bill, a partial shutdown may begin on October 1. Currently, negotiations are at a standstill, with Democrats blocking Republican proposals, and the White House threatening large-scale layoffs of federal employees, increasing the probability of a shutdown.
However, based on historical experience, government shutdowns (especially short-term) often have limited impacts on financial markets:
• In the past few shutdowns lasting more than 5 trading days, the S&P 500 index has more often risen rather than fallen.
• During shutdowns, the stock market has performed positively half the time, and generally trends higher three and six months later.
• The market typically views shutdowns as political events rather than economic crises, and if they end quickly, the impact is smaller.
Of course, ❗️ this time the environment is special: political divisions are intensifying, the economy is fragile (e.g., high interest rates), and prolonged shutdowns could lead to losses of about $7 billion per week, or amplify uncertainty, resulting in short-term market volatility or turbulence ⚠️.
Risk Warning: Please remain vigilant, pay attention to real-time news and economic data, and avoid emotional trading. A government shutdown may delay data releases, increasing decision-making uncertainty; investment carries risks, and it is advisable to rationally diversify assets and not go all in based on a single event. Trade cautiously and protect your principal!
