The Government Shutdown Continues. History Suggests This Is What the Stock Market Will Do Next.

Core Insights - The current government shutdown is in its fourth week, making it the second-longest in U.S. history, affecting approximately 900,000 federal workers who are furloughed and not receiving paychecks or government services [1][2] Market Reaction - Despite the ongoing government shutdown, the stock market, represented by the S&P 500 index, has shown relative stability, experiencing minor fluctuations but remaining flat overall since the shutdown began on October 1 [2] - Historical data indicates that the stock market's performance during past shutdowns has varied significantly, with losses ranging from 4.4% to gains of 10.3%, although most shutdowns post-1990 have resulted in gains [4] Historical Context - Following the longest shutdown from December 22, 2018, to January 25, 2019, the S&P 500 gained 18% in the first 100 days and 36% a year later, while the third-longest shutdown from December 16, 1995, to January 6, 1996, saw a 6.2% gain in the first 100 days and 26% in the first year [6]