Markets don’t like surprises, but they’re surprisingly good at ignoring Washington now nearly two weeks into the government shutdown, investors are asking the usual questions: How long will it last? Will it hurt the economy? And does it actually matter for the market?
1 | Shutdowns in Perspective
The current shutdown began October 1, 2025 - now on Day 12, putting it among the longer ones but still far from record-setting. The 2018-19 shutdown lasted 35 days; 2013’s stretched to 16; and the mid-’90s pair ran 5 and 21 days.
Historically, markets have taken these events in stride. According to S&P Global Market Intelligence, the S&P 500 has risen in over half of all shutdowns since 1976, averaging roughly flat performance. The longest shutdowns barely dented long-term returns. In short: big headlines, small market footprints.
2 | What’s Different This Time
While most shutdowns are political theater, this one lands in a trickier environment - high interest rates, sticky inflation, and investors on edge for any data that might steer the Fed. With many agencies closed, the flow of economic reports slows to a trickle. That data blackout adds guesswork to an already uncertain landscape.
Then came Friday’s twist: tariffs. A sudden proposal of potential 100% tariffs on China did more to rattle markets in a single afternoon than the shutdown did all week. Tariffs hit earnings, supply chains, and consumer prices directly - a real-economy concern, not just a policy stalemate.
3 | What Could Change the Tone
If the shutdown resolves quickly, it’ll fade from memory. But if it drags on past 20 days, the ripple effects build: delayed paychecks, slower spending, missing data, and rising political fatigue. Add tariff risk or Fed missteps on top of that, and volatility could pick up fast.
4 | This shutdown
This shutdown is mostly a budget standoff, not a financial crisis. History suggests markets recover quickly once government operations resume. The bigger issue is how investors react - not the event itself. That’s why it pays to focus less on the headlines and more on how your portfolio is positioned for risk.
5 | Staying Prepared
We can’t predict when headlines will hit, but we can manage how portfolios respond when they do. I use disciplined, evidence-based strategies designed to help address market risk when conditions change, while keeping clients aligned with their long-term goals.
Shutdowns and tariffs come and go - but having a steady process for navigating both never goes out of style.