Copyright Benzinga
The U.S. Senate is poised to vote to end the record-breaking 40-day government shutdown, potentially bringing relief to federal workers and the economy. For investors nervous about the political gridlock, history suggests the market’s real move comes after the reopening—and it's typically a strong one. S&P 500 Has Averaged A 12.3% Gain After Past Shutdowns Historical data analysis of past government shutdowns shows that the S&P 500 has rallied significantly in the 12 months following the end of the political stalemate, posting an average gain of 12.3%. The analysis, highlighted by Ryan Detrick of Carson Group, reveals a powerful bullish precedent. In all the instances since 1976, the S&P 500 was positive 20 out of 22 times one year after the government reopened, representing a 91% win rate for investors. This optimistic long-term trend stands in stark contrast to the market’s performance during the shutdowns. Detrick's data shows the median S&P 500 return during the shutdowns themselves was a mere 0.1%, reinforcing the idea that the market treats the actual gridlock as short-term noise. During this current 40-day impasse, the market has gained a modest 0.6%. See Also: Senate Advances Vote To End Record 40-Day Shutdown As Thanksgiving Looms, Democratic Centrists Reach Deal With GOP Leaders Senate Nears Vote On Funding Bill The breakthrough in Washington came Sunday night after a group of at least eight centrist Senate Democrats reached a deal with GOP leaders and the White House. The agreement would temporarily fund the government through January, merging a short-term funding extension with three full-year spending measures. The package still requires approval from the House and President Donald Trump. The pressure to end the stalemate intensified as its economic impacts mounted. The shutdown has caused chaos for Thanksgiving travel, with American Airlines Group Inc. (NASDAQ:AAL) canceling over 220 flights due to air traffic controller shortages, and has also jeopardized federal food aid, with the USDA noting SNAP benefits would not be issued. Markets Closed Mixed After A Turbulent Week The S&P 500, Nasdaq 100, and Dow Jones indices declined, 2.23%, 4.04% and 1.49%, respectively, in the last week. However, the indices closed in a mixed manner on Friday. The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, also closed mixed on Friday. The SPY was up 0.098% at $670.97, while the QQQ declined 0.32% to $609.74, according to Benzinga Pro data. The futures of the S&P 500, Nasdaq 100, and Dow Jones indices were trading higher on Monday. Read Next: Scott Bessent Warns SEC Shutdown Is Halting Major IPOs, Poses ‘Serious National Security Issue’ For America Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo courtesy: Shutterstock
