The ongoing US government shutdown crisis has cast a long shadow over Wall Street as the earnings season draws to a close, with investors anxiously watching Washington for any breakthrough in the political stalemate.
The shutdown reached its 40th day on Sunday, creating widespread disruptions across federal services even as senators conducted weekend negotiations hoping to break the impasse that has affected domestic flights, threatened food assistance programs, and left government employees without pay.
Market Impact and Political Standoff
Stock indices closed mixed on Friday but registered their first weekly loss in four weeks, reflecting growing investor anxiety. The S&P 500 managed a slight gain of 0.1% to close at 6,728.80, while the Dow Jones Industrial Average rose 0.2% to 46,987.10. However, the technology-heavy Nasdaq Composite fell 0.2% to 23,004.54.
For the entire week, the damage was more significant with the S&P 500 dropping 1.6%, the Dow falling 1.2%, and the Nasdaq recording its worst weekly performance since April with a 3% decline.
Republican leaders are attempting to force votes on legislation that would reopen government operations until January while securing full-year funding for several state departments. However, securing the necessary Democratic support remains uncertain, leaving the resolution in doubt.
Earnings Season Winds Down with Key Reports
With only 11 S&P 500 companies remaining to report quarterly results, the earnings season is approaching its conclusion. Market participants will closely watch results from major corporations including Walt Disney and Cisco in the coming days.
Other notable companies scheduled to report third-quarter results include CoreWeave, Occidental, eToro, Plug Power, Oklo, Nexgel, Flutter Entertainment, Rumble, Applied Materials, Newsmax, Quantum, AmpliTech, and Data Storage.
Economic Calendar and Safe-Haven Flows
The upcoming week features several important economic releases that could influence market sentiment. The economic calendar includes the NFIB optimism index for October on Tuesday, though bond markets will remain closed for Veterans Day.
Wednesday will see several Federal Reserve officials delivering speeches, while Thursday brings separate reports on initial jobless claims for the week ended November 8 and the crucial Consumer Price Index (CPI) for October. Friday concludes with reports on US retail sales and Producer Price Index (PPI) for October.
The uncertainty surrounding the government shutdown has boosted safe-haven assets, with gold prices climbing on Friday. Spot gold rose 0.7% to $4,005.21 per ounce, while US gold futures for December delivery added 0.5% to settle at $4,009.80 per ounce.
Artificial Intelligence-linked stocks will remain under scrutiny following last week's significant pullback, with investors assessing whether the decline represents a temporary correction or the beginning of a broader trend.
Adding to the concerns are potential travel disruptions during the upcoming Thanksgiving holiday period if the shutdown persists, which could further impact consumer sentiment and economic activity during one of the busiest travel seasons in the United States.
