Markets Hold Steady Amid Shutdown and Data Delays
Market Recap for the Week of October 19, 2025
Last week was supposed to bring a series of important economic reports — including September’s PPI (inflation), retail sales, and building permits — that could have provided valuable insight into the state of the U.S. economy. However, due to the ongoing government shutdown, all of these releases have been delayed.
Despite the lack of fresh data, the U.S. stock market has shown little concern. The S&P 500 sits less than 2% below its all-time highs. While valuations remain elevated, markets rarely decline meaningfully without a clear catalyst. In other words, a correction typically requires a negative surprise — and while that will inevitably come at some point, it’s impossible to predict when.
The next Federal Reserve meeting is now less than two weeks away. Markets are currently pricing in a 99% probability of a 25-basis-point rate cut and a 1% chance of a 50-basis-point cut. The Fed faces a unique challenge this time: with key data unavailable, policymakers will have to make decisions with limited visibility into inflation and labor market trends.
“With key economic data delayed by the government shutdown, markets and policymakers are navigating uncertainty with limited visibility into inflation and labor trends.”
Chart of The Week
This week’s chart highlights the average performance of U.S. stocks during and after government shutdowns. Historically, shutdowns have not been strongly correlated with negative market returns. That said, there are two key caveats:
The average shutdown lasts about four days — this one has already stretched to 18 days.
Market performance depends on many factors beyond government operations, making it risky to draw conclusions based on a single variable.
In short, while a prolonged shutdown could cause some short-term disruptions, history suggests investors should focus more on broader fundamentals than the political noise in Washington.
The commentary in this blog is for informational purposes only and should not be taken as personalized investment advice
Source: Morningstar as of 9/30/25, U.S. House of Representatives.. Stock market represented by the S&P 500 PR Index, principal return. Past performance does not guarantee or indicate future results. Index performance is for illustrative purposes only. You cannot invest directly in the index.
