Buy the rumor, sell the news: The S&P 500 traded down about 1% this morning as the longest government shutdown in US history ended, paring gains from earlier in the week as the deal came together in Congress. Some services, such as food assistance, will come back online immediately, while flight schedules should return to normal in time for the upcoming holiday season.
Economic activity generally recovers quickly after shutdowns; the Congressional Budget Office estimates $11 billion of permanently lost growth from this one, or about $80 per household. But this standoff took a toll on consumer sentiment, which is at its lowest level since June 2022, and the deal that ended it punts on the expiration of health care subsidies, which will raise premiums for millions of people.
And the White House said Wednesday that it may never release October inflation data or the month’s unemployment rate, which will leave the Federal Reserve without key pieces of information as it weighs a December interest-rate cut.
Traders got less certain as the shutdown dragged on and corporate layoffs piled up:
