The Shutdown Is Over. Winter Is Usually Good For Stocks. Here's Why Investors Are Selling.

Core Insights - The stock market faced a decline despite the end of the longest government shutdown in U.S. history, which was expected to positively impact equities [2][3] - President Trump signed legislation to reopen the federal government, alleviating economic pressure on over 1 million federal workers and allowing federal agencies to resume releasing important economic data [2] - The tech-heavy Nasdaq index led the decline, falling more than 2%, possibly indicating a "buy the rumor, sell the news" scenario [3] Market Trends - Historically, the end of government shutdowns has been beneficial for stock performance, with the S&P 500 showing gains in the one- and three-month periods following budget resolutions [5] - November has been the best month for the S&P 500 on average since 2000, and December often sees a "Santa Claus rally," yet current investor sentiment appears cautious due to concerns over an AI bubble and uncertain economic data [6] Sector-Specific Concerns - Tech stocks have been particularly affected by fears of an AI bubble, with significant declines in shares of companies like Nvidia and Palantir, despite the latter's strong earnings report [8][9] - The majority of the S&P 500's worst-performing stocks included high-profile AI beneficiaries, indicating a broader concern about the sustainability of the AI boom fueled by heavy investments in data centers [9]