US Stocks Rally as Senate Passes Deal to End Record Government Shutdown
Legislation to fund the government through January 2026 now heads to the House, easing weeks of economic uncertainty that has weighed on the market.
Wall Street breathed a sigh of relief on Monday after the Senate passed a bipartisan funding package aimed at ending the longest government shutdown in U.S. history, a 42-day stalemate that has inflicted billions of dollars in economic damage and rattled investor confidence.
The bill, which would fund federal agencies through January 30, 2026, cleared the Senate with a 60-40 vote and now heads to the House of Representatives, where a vote is anticipated as early as Wednesday. The breakthrough in negotiations sparked a broad market rally, with investors betting that the resolution will remove a significant headwind for the U.S. economy.
The economic costs of the protracted shutdown, which began on October 1, 2025, have become increasingly apparent. Recent estimates suggested the standoff wiped as much as $18 billion from the U.S. gross domestic product in the fourth quarter. The deadlock left approximately 1.4 million federal workers either furloughed or working without pay, withholding over $9 billion in paychecks from the economy and threatening to dampen consumer spending.
This resolution promises to restore income for those workers, with the agreement guaranteeing back pay. The deal's passage in the Senate followed weeks of intense negotiations. According to reports from CBS News, the package includes full-year appropriations for several key departments, including Veterans Affairs and Agriculture.
Optimism that lawmakers were finally closing in on a deal sent major stock indexes sharply higher on Monday. As noted by Investopedia, the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all posted strong gains as the political gridlock appeared to break.
"The market is reacting to the removal of a key uncertainty," said one market analyst. "Averting these self-inflicted economic wounds is crucial, and while there was always a belief that a deal would be reached, the prolonged nature of this shutdown was becoming a real concern."
The positive reaction on Wall Street stands in contrast to recent consumer sentiment data, which has shown growing anxiety among the public. A report last week indicated that U.S. consumer sentiment had fallen significantly as the shutdown dragged on, reflecting households' worries about the broader economic consequences.
While the bill's passage through the Senate marks a critical step, its path is not yet entirely clear. The legislation now requires approval from the House, where Speaker Mike Johnson has not made a firm commitment. However, President Trump has signaled his support, urging a swift passage. The deal also punts on other contentious issues, including a Democratic push to extend Affordable Care Act subsidies, which Republicans have agreed to address in a separate vote later this year.