ETFs Shrug Off Government Shutdown as Markets Eye Rate Cuts

SPY and QQQ rallied despite a federal government shutdown and soft jobs data, as traders increased bets on imminent Fed rate cuts. The S&P 500 ETF gained 1.2% while the Nasdaq-100 tracker climbed 1.8%, brushing off political gridlock in Washington.

Historical patterns suggest limited market impact from shutdowns. Carson Group data shows the S&P 500 averages 12.7% gains in the year following government reopenings. "Markets view these as temporary disruptions," said strategist Ryan Detrick, noting GDP typically recovers shutdown losses within quarters.

The Senate failed to pass competing funding bills, prolonging the stalemate. Vice President Vance warned of growing risks to federal workers if the impasse continues, though risk assets remain focused on monetary policy expectations.