Stocks rose on Monday after Senate lawmakers took a key step toward a potential deal to end the historic U.S. government shutdown.
The Dow Jones Industrial Average rose by 404 points, or 0.9%. The S&P 500 rose 1.6%, while the Nasdaq Composite advanced 2.3%.
Nvidia, Broadcom and other AI market leaders led gains as a possible end to the shutdown put investors back in a risk-on mood. Microsoft shares also rose nearly 1%, on track to snap an eight-day losing streak. That’s the stock’s longest daily decline since 2011. The stock led the broader market lower last week as Wall Streeters grew concerned about elevated valuations in artificial intelligence trading.
Investors are still watching lawmakers negotiate a federal funding bill to end the shutdown, SEEbiz reports.
A procedural measure allowing for a second vote on the deal on Monday was approved by at least 60 votes in favor, after eight senators in the Democratic caucus defected from party leadership to support the deal.
The deal would reopen the government in January and reverse some of the recent mass federal layoffs. It also includes future protection for civil servants. The deal does not include extending subsidies from the Affordable Care Act, a key sticking point for most Democrats, but would require a vote on the subsidies in December.
A final vote in the Senate on the funding bill will have to take place, followed by passage in the House of Representatives. House Speaker Mike Johnson, Republican of Louisiana, has already called on members of the House to begin traveling to the capital to get a vote on the deal as soon as possible, which he expects to take place sometime this week.
Fears about the shutdown have pushed consumer sentiment to its lowest level in more than three years, just above the worst ever, according to a University of Michigan survey released Friday. Due to the shutdown, federal agencies are no longer releasing many key economic reports, including the consumer and producer price indexes, which were scheduled for release this week.
“It was a tumultuous November for risk assets,” Tim Holland, chief investment officer at Orion, told CNBC, citing investor concerns about the shutdown, along with valuations and a possible AI bubble, as key drivers of the recent bearish sentiment.
Over the past week, the tech-leaning Nasdaq posted its worst week since April’s tariff-induced selloff, losing roughly 3%. Both the S&P 500 and the Dow, which includes 30 stocks, lost more than 1% for the week.
