Stock Futures Edge Higher as Senate Votes on Funding Deal to End Shutdown

Stock futures were slightly higher late Monday, building on a strong trading day as the Senate prepared to vote on a compromise deal to reopen the U.S. government.

Futures tied to the Dow Jones Industrial Average rose 23 points, or 0.03%, while S&P 500 futures and Nasdaq 100 futures each gained less than 0.1%. Yesterday, major U.S. indexes rallied broadly on optimism surrounding the potential end to the record-setting government shutdown, which has impacted federal workers and economic data collection. The Nasdaq Composite saw its best performance since May 27, climbing roughly 2.3% as investors re-entered positions in artificial intelligence stocks following last week’s sell-off.

The Senate is expected to begin voting Monday evening on the funding agreement, which would extend government operations into January and reverse recent federal worker layoffs. The deal does not include a provision for extending Affordable Care Act subsidies, a key Democratic demand, but will schedule a separate vote on those tax credits in December. Investor sentiment shifted yesterday toward risk-on assets, with Nvidia jumping 5.8% – contributing over a quarter of the S&P 500’s gains – and Google parent Alphabet rising 4%, ending Microsoft’s eight-day losing streak with a 1.9% increase. This rebound signals a potential easing of concerns about the strength of the AI sector, which has been under pressure recently.

“The end to the shutdown takes another risk off the table for markets and the economy, especially since we were edging up to a period where the shutdown would have lasting impact on the economy, by way of missed paychecks and lower consumption as a result, and even a pullback in travel,” said Sonu Varghese, global macro strategist at Carson Group. “The government re-opening will also be helpful because we’ll start getting macroeconomic data once again, and so the Fed will not go into their December meeting flying blind.” You can learn more about the impact of government shutdowns on the economy from the Congressional Budget Office and how the Federal Reserve operates at federalreserve.gov.

Officials anticipate the Senate vote will conclude late tonight, paving the way for the government to reopen and federal employees to return to work.