To The Moon

Government Shutdown, No Market Meltdown

Shutdown

The federal government shutdown has entered its second week, yet investors remain unfazed. Despite limited progress in Washington and a few early signs of strain, like rising flight delays and uncertainty over back pay for federal workers, markets continue to power higher.

• $S&P 500(.SPX)$ : +0.6% (record close)

• $NASDAQ(.IXIC)$ : +1.1% (record close) $NVIDIA(NVDA)$

• Dow Jones Industrial Average: flat

• Best Sector: $Technology Select Sector SPDR Fund(XLK)$ +1.8%

• Worst Sector: $Energy Select Sector SPDR Fund(XLE)$ -0.6%

The resilience reflects a broader confidence that the shutdown’s economic fallout remains limited, at least for now. Markets often stay buoyant through political turbulence, and this time is no exception.

Fed Minutes Signal More Cuts Ahead

The Federal Reserve’s September meeting minutes revealed a divided committee grappling with stubborn inflation and a softening labor market. While the FOMC already cut rates by 25 basis points to a 4.00–4.25% range last month, most members still expect further easing before year-end.

• 10 Fed officials project two additional rate cuts in 2025.

• 9 officials see one or fewer.

The Fed remains cautious but open to easing further, fuel for equity markets that are already pricing in lower rates.

Changing of the Guard? Fed Chair Speculation Builds

As the White House nears a decision on the next Federal Reserve Chair, investor attention is turning to Kevin Warsh, a leading contender and vocal critic of current policy.

Warsh advocates a “regime change” at the central bank, rethinking its models for inflation, reducing its political footprint, and pulling back from supervisory and balance sheet activities.

“We need to fundamentally rethink macro, what inflation is and how policy interacts with it,” Warsh told The Wall Street Journal.

His potential nomination could mark a significant shift toward tighter coordination between fiscal and monetary policy, and may alter how markets interpret the Fed’s role altogether…

The Week Ahead

• Thursday: Delta Air Lines, Levi Strauss, and PepsiCo report earnings

• Friday: University of Michigan releases Consumer Sentiment Survey

Earnings season begins in earnest next week, setting the stage for markets to test whether strong expectations can match actual performance.

Market View

The market’s calm amid Washington’s chaos highlights investors’ current priorities: earnings strength, rate-cut optimism, and AI-driven growth. Unless the shutdown begins to dent consumer confidence or disrupt data releases, momentum…

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This summary is for informational purposes only and does not constitute financial advice. Investors should conduct their own research before making investment decisions.