Global Stocks Hover Near Record as US Shutdown Ends; Focus Turns to Fed Path

 Key Takeaways

• Shutdown resolution lifts sentiment: U.S. House passes bill ending the record shutdown; Trump expected to sign it.

• Stocks near record highs: Global indices steady after a four-day rally in the S&P 500.

• Fed uncertainty persists: Lack of economic data clouds rate-cut outlook ahead of the December FOMC meeting.

• Oil under pressure: Brent near US$62 after OPEC says supply has outpaced demand.

• Currency watch: Yen trades near 155; Japan issues new warning against sharp moves.

• Australia jobs surprise: Strong data curbs expectations for near-term RBA rate cuts.

Global equities steadied near record highs as optimism over the end of the U.S. government shutdown lifted sentiment, though investors remained cautious amid limited economic data that has clouded the Federal Reserve’s policy outlook.

The MSCI All Country World Index and Asian shares fluctuated between small gains and losses, while S&P 500 futures edged up 0.1%, extending a four-day winning streak. The U.S. House of Representatives voted 222–209 to approve a temporary funding bill that will end the longest government shutdown in history, paving the way for President Donald Trump’s signature to reopen federal agencies within hours.

“While the markets are pricing the end of the government shutdown, there’s an even bigger mountain ahead — the resumption of all the economic data we’ve missed,” said Michael Landsberg, chief investment officer at Landsberg Bennett Private Wealth Management. “Once the fog lifts, markets may need to reprice if expectations have run ahead of fundamentals.”

Fed Outlook in Focus

With U.S. economic indicators such as unemployment and inflation data delayed, investors are left guessing how the Fed will assess the economy at its December meeting. Markets currently expect at least one more quarter-point rate cutthis year after back-to-back reductions in recent months.

“As data releases resume, the case for a Fed rate cut in December should re-emerge, reinforcing a risk-on backdrop,” said Seema Shah of Principal Asset Management. “This environment favours U.S. equities, especially Big Tech and cyclicals poised to benefit from a more accommodative Fed stance.”

Still, Boston Fed President Susan Collins signalled caution, saying the central bank’s current rate range of 3.75% to 4% remains “mildly restrictive” and appropriate given inflation remains above target.

Currencies and Commodities

The Japanese yen hovered near 155 per dollar, after Finance Minister Satsuki Katayama warned against excessive currency moves — close to levels where Tokyo last intervened.

In commodities, Brent crude held near US$62 a barrel after tumbling almost 4% in its steepest drop since June, following an OPEC report showing global supply has exceeded demand earlier than expected. West Texas Intermediatetraded around US$58, weighing on Australian energy stocks.

Meanwhile, Australian equities extended losses and short-term yields jumped after stronger-than-expected jobs datatempered bets on rate cuts from the Reserve Bank of Australia.

Shutdown Impact and Market Sentiment

The six-week standoff between Trump and congressional Democrats, which disrupted flights and delayed food aid, is set to end — though restarting the government’s full operations could still take days.

Despite the turmoil, the S&P 500 has gained about 2% since the shutdown began, outperforming average returns during previous U.S. shutdowns, according to CFRA Research.