Wall Street started the week on a high note as hopes grew that Washington is finally nearing a deal to end the record-breaking 39-day government shutdown.
The Nasdaq Composite jumped 2.2%, while the S&P 500 rose 1.5% and the Dow Jones gained 0.6%.
Tech stocks led the rebound, reversing much of last week’s losses that saw investors sour on AI valuations and Big Tech earnings. Nvidia, Microsoft, and AMD all moved sharply higher in early trade, while Palantir clawed back part of its recent 8% slump.
Optimism returned after a weekend of dealmaking in Washington saw the Senate advance a bill to reopen the government through January 30. Enough Democrats sided with Republicans to overcome a filibuster, setting the stage for a final vote later this week. The proposal, however, still faces an uncertain path in the House.
The shutdown has delayed key inflation readings, including CPI and PPI, and has weighed heavily on consumer sentiment, which recently sank near record lows. Investors are now betting that a resolution could restore confidence and allow the Federal Reserve to resume normal economic monitoring.
After a bruising week for equities, Monday’s move marks a notable shift in tone. Traders are still cautious about overextended valuations in the AI sector, but relief over the potential end of the shutdown has given markets some much-needed breathing room.
