To The Moon

Political Tensions Ease, Slightly

It was day 38 of the U.S. government shutdown, and for the first time in weeks, Wall Street caught a faint glimmer of optimism. After days of mounting travel disruptions, public frustration, and growing fears of economic strain, investors appeared to take heart from signs of political movement in Washington.

Democrats proposed reopening the government in exchange for a one-year extension of healthcare subsidies, a symbolic offer that was quickly rejected but nonetheless marked the first real step toward negotiation.

Markets reacted with cautious relief. The Dow Jones Industrial Average, down more than 400 points midday, staged a late-session rally to close up 75 points (+0.2%). The $S&P 500(.SPX)$ gained 0.1%, while the $NASDAQ(.IXIC)$ dipped 0.2%. $Tesla Motors(TSLA)$

For the week, however, it was still painful: the Dow lost 1.2%, the S&P 500 fell 1.6%, and the Nasdaq dropped 3%.

• Hot Stock: Expedia Group +17.6%

• Biggest Loser: Take-Two Interactive –8.1%

• Best Sector: +1.5% $Consumer Staples Select Sector SPDR Fund(XLP)$

• Worst Sector: –0.4% $Technology Select Sector SPDR Fund(XLK)$

Stocks

Economic Anxiety Deepens

Despite Friday’s modest rally, investors remain on edge. The Federal Reserve’s next move is unclear, job market data are contradictory, and key government statistics, including the October employment report, remain unavailable due to the shutdown.

Fresh signs of strain came from the University of Michigan’s consumer sentiment index, which plunged to 50.3, near a record low and 30% below year-ago levels. The decline was broad-based, cutting across income levels and political affiliations.

Survey director Joanne Hsu attributed the drop to growing fears that the prolonged shutdown could damage the economy. Interestingly, the only group reporting improved sentiment were households with large stock holdings, whose optimism rose 11%, thanks to earlier market gains.

In short, even as stock owners hold out hope, Main Street confidence is collapsing, a potentially worrisome signal for holiday spending and growth expectations.

Market Outlook: Politics Takes the Wheel

This week’s trading suggests a subtle but meaningful shift. For much of the fall, markets largely ignored the shutdown, focusing instead on AI-driven growth stories and corporate earnings. Now, that’s changing.

Friday’s rally hints that political negotiations themselves could become the new driver of sentiment. Investors may increasingly trade on signs of progress, or renewed gridlock, out of Washington, rather than purely on economic fundamentals.

Meanwhile, the data blackout continues to cloud the outlook. Inflation, labor, and consumer figures, all vital to the Fed’s next rate decision, remain suspended. Without clarity, volatility may persist as investors try to price policy uncertainty in real time.

The Week Ahead

Earnings season winds down next week, but notable names remain on deck.

• Monday: Maplebear, Coreweave, Occidental Petroleum, Plug Power, Barrick Mining

• Tuesday: Oklo

• Wednesday: Cisco Systems, Flutter Entertainment, Tencent Music, Circle Internet, On Holding, GlobalFoundries

• Thursday: Walt Disney (last report to include streaming subscriber numbers), Applied Materials, Brookfield, JD.com $TENCENT(00700)$

The U.S. bond market will close for Veterans Day on Tuesday, while equities remain open.

The Bottom Line

After nearly six weeks of political paralysis, even a small sign of movement was enough to spark a “risk-on” flicker in weary markets. Yet the underlying message remains clear: sentiment is fragile, consumers are anxious, and investors are trading in the dark…

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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.