Shutdowns Happen — Markets Have Weathered Them Before
Market Recap for the Week of October 5, 2025
Due to Congress’s inability to reach an agreement on a temporary spending resolution, the U.S. government has officially shut down. Of course, a “shutdown” doesn’t mean all government operations cease—it primarily affects non-essential services. Core functions such as national defense, Social Security, and Medicare payments will continue largely without interruption.
A few quick facts about government shutdowns:
The U.S. has experienced 22 shutdowns since 1976
The average duration has been about 8 days, with the longest lasting 34 days.
During shutdowns, the S&P 500 has averaged a gain of 0.3%.
Twelve months after shutdowns, the index has historically risen an average of 12.7%.
If history is any guide, a shutdown by itself isn’t necessarily a bearish signal for stocks. However, each one occurs under its own unique economic circumstances.
One key impact this time is that the Bureau of Labor Statistics (BLS)—which publishes the monthly employment and inflation data—has paused its operations. These reports are among the most closely watched indicators of economic health. What makes this shutdown notable is that it comes amid signs of a softening labor market, leaving investors with even less visibility into current conditions.
While some private firms continue to track employment and inflation trends, official government data remains the most comprehensive and trusted source. Overall, the shutdown is not a market catastrophe, but the sooner it ends, the better for economic clarity.
“The S&P 500 has historically gained ground during and after shutdowns—suggesting that political gridlock doesn’t always translate to market losses.”
Chart of The Week
This week’s chart, from Apollo Asset Management, highlights a sharp rise in U.S. tariff revenue. For much of the past decade, tariff collections were minimal, but they’ve surged this year. However, this isn’t an outright positive—higher tariffs translate to higher costs for consumers or thinner profit margins for businesses.
The commentary in this blog is for informational purposes only and should not be taken as personalized investment advice
Chart Source: Apollo Chief Economist
