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Markets Jump as Deal to End Shutdown Moves Forward

Nov 10, 2025
Markets Jump as Deal to End Shutdown Moves Forward

By Joe Mazzola, Charles Schwab

Markets jumped early Monday after Senate Republicans and Democrats moved forward on a deal to reopen the government and end the longest shutdown in U.S. history.

The shutdown was taking a growing toll on the economy. The full impact has been difficult to measure because of a lack of government data, but the nonpartisan Congressional Budget Office estimated on October 29 that a shutdown of six to eight weeks would cut growth in real gross domestic product by 1.5 to two percentage points in the fourth quarter. "The bottom line is the government should reopen this week," said Michael Townsend, managing director, legislative and regulatory affairs at Schwab. "The fastest this could be done is probably Wednesday, but Thursday or Friday may be a more realistic timeframe."

Friday saw the broader market edge higher after an early tumble, but the tech-heavy Nasdaq Composite is down 3% this month after its worst weekly performance since April. Nvidia (NVDA) and Meta Platforms (META) suffered double-digit weekly losses. A variety of issues dogged markets and it's hard to pin down one to blame most. In addition to the shutdown, and the Federal Reserve's more hawkish stance, worries about AI valuations and company spending on AI hit chip stocks hard last week. The market also may have simply been due for a technical pullback. Still, the S&P 500 closed the week down only 2% from its all-time high.

Three things to watch

  1. Earnings sparse but hard hitting: The handful of companies reporting this week include heavy hitters like Applied Materials (AMAT), Cisco (CSCO), CoreWeave (CRWV), and Walt Disney (DIS). Meanwhile, tomorrow afternoon's report from nuclear start-up Oklo (OKLO) might get extra attention as investors watch selling in companies like it that lack earnings or revenue. Still, shares had powered higher this year on bullish sentiment around the role of nuclear energy in AI. In the aggregate, third-quarter earnings have been strong, up more than 16%, according to data analytics firm LSEG I/B/E/S, but investors aren't necessarily rewarding companies that had better-than-expected earnings. "What we're seeing in earnings season is a heightened amount of sensitivity," said Liz Ann Sonders, chief investment strategist at the Schwab Center for Financial Research, in a recent podcast. "You're seeing companies that miss disproportionately punished, and even the mild beats are not getting rewarded relative to the market's overall performance. The stocks that have done incredibly well in the immediate aftermath of earnings season have been the huge beats. So, I think the margin of error is showing signs of shrinking."
  2. Technical skid gains momentum: In chart action Friday, the S&P 500 index made a statement by dropping below the 50-day moving average for the first time since the end of April. It had tested that level several times during last month's skid but found buying support there each time. The question now becomes whether that technical support at the dip continues after Friday's late rebound back above the 50-day, now near 6,670. "If support doesn't hold up at the 50-day, this could suggest some more downside price discovery is needed before stabilization," said Nathan Peterson, director of derivatives research and strategy at the Schwab Center for Financial Research, in his Weekly Trader's Outlook. While dip buying is one possibility, the other is investors moving more money into perceived "safe" zones like the dollar, gold, or Treasuries. That—along with possible sector rotation—is a possible theme to watch for in days ahead. While gold climbed back above $4,000 an ounce Friday, the dollar fell and Treasuries barely budged, implying that if there's a "flight to safety," it may be showing up in defensive sectors like staples and health care, which both had good weeks.
  3. Treasury notes on the block in closely watched auctions: Whether the Treasury market sees buying demand could depend on a series of auctions starting early this afternoon with 3-year notes up for bid. Wednesday features a 10-year Treasury note auction after the 10-year yield fell one basis point to 4.09% last week despite some earlier volatility. Treasury yields are generally up from before the Fed's last rate cut despite worries about a shaky economy. Poor auction results might send yields higher, raising borrowing costs. Yields haven't flagged much recently despite worries about layoffs and the AI sell-off, suggesting inflation and burdensome government debt remain concerns. "It's important to remember that the Fed only has so much room to cut rates if inflation doesn't come down," said Kathy Jones, chief fixed income strategist at the Schwab Center for Financial Research, noting that the shutdown may have an impact on any remaining cuts this year and next. "They can anticipate slower growth and lower inflation. But until it happens, if they keep reducing the fed funds rate, they're going to be right on top of the inflation rate or under. And that's going to give us negative real interest rates, which is certainly not what the Fed wants to do."

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