Wall Street Rallies as Hopes Rise for End to US Government Shutdown; Nvidia, Alphabet Lead Market Surge

Wall Street opened the week with a strong movement on Monday, with all three major indices rallying sharply on the renewed optimism concerning end to the US government shutdown. There were signs of progress in Washington, which, combined with a tech-led rally en route to a Nasdaq milestone, pushed markets and sentiments all across.

Shutdown Breakthrough Promises Impetus to Markets

The political deadlock that would otherwise have paralyzed government operations and delayed key economic data for weeks was broken just long enough for news to arrive that US senators agreed to advance a procedural vote on a spending bill passed by the House of Representatives, much to the delight of investors. That bill, if amended and passed, would fund government operations until January 30, thus assuring markets that some fiscal uncertainty is behind them.

White House economic adviser Kevin Hassett, however, has warned that if the shutdown lasts, it still may put a drag on growth for the fourth quarter, emphasizing that time is of the essence in resolving this.

At about 9:44 am ET, the Dow hit an intraday high of 283.95 points (0.60%) at 47,271.05, with the S&P gaining an intraday high of 81.91 points (1.22%) at 6,810.71. The Nasdaq Composite, meanwhile, opened one of its strongest sessions in recent weeks, so far racing up 451.61 points (1.96%) to 23,456.15.

Meanwhile, the 10-year Treasury yield softened a tad to 4.10% from 4.11% on Friday; buying of equities, hence, sees renewed interest.

Tech Titans Drive the Rally

Nvidia's new 3.7% rally saw technology stocks do more bull work for themselves in the AI-driven semiconductor space. Alphabet and Amazon.com rallied up 3%, while TSMC rose 3.2% after reporting a 17% increase in October revenue on a year-on-year basis.

Tesla climbed 3.88% despite the resignation of Siddhant Awasthi, the head of the Cybertruck program—a sign that investor confidence in the EV giant's growth prospects remains intact.

And airline stocks raced like champagne bubbles. United Airlines climbed 2.5%, while Delta Air Lines rose 1.8% in sympathy with an uptick in consumer sentiments.

Losers and Laggards

Not all sectors rallied together. Health insurers became targets after reports surfaced that the US Senate's deal to end the 40-day government shutdown did not include the extension of subsidies for the Affordable Care Act.

Centene crashed 9.5%, down nearly 2% are Humana and Elevance Health.

In M&A corporate news, Metsera plunged 15.6% after Pfizer’s triumph in a bidding war to buy the biotech for $10 billion, triggering sell-offs on the expectation of a restructuring.

Precious Metals Shine While the Dollar Weakens

In commodities, gold prices skyrocketed on hopes that the Federal Reserve would take the rate cuts next month after weaker US economic data.

By that time zone at 11:38 GMT, spot gold had risen by 2.1% to $4,082.17 per ounce, with US gold futures for December delivery climbing 2% to $4,090.50 per ounce.

The rally permeated into the metals market with silver gaining 3.4% to $49.95, platinum up 1.7% to $1,571.10, and palladium rising 2.2% to $1,410.48.

Market Mood: Cautious Hope Returns

Despite Monday's rebound lending an air of optimism, traders act with caution. Whether this rally sustains will be contingent upon the political fallout of the US shutdown and also the forthcoming measure of the Federal Reserve.

Wall Street is seemingly exhaling a bit, while investors keenly watch Washington for signs that this never-ending lockout may finally see an end.