šØ US GOVERNMENT SHUTDOWN RISK: WHAT THE MARKETS ACTUALLY DO (FACTS ONLY)
A U.S. government shutdown is not just political drama ā it can affect markets because it increases uncertainty and pauses key economic reporting.
But hereās what history shows:
š FACT 1: Shutdowns create short-term uncertainty, not long-term crashes
Markets dislike uncertainty, so volatility can rise temporarily ā but shutdowns do not usually cause major long-term sell-offs.
š FACT 2: Stock markets often remain flat or even rise
Across 21 shutdowns since 1976, the average stock performance was flat to slightly positive during shutdown periods.
š FACT 3: The 2018ā2019 shutdown (35 days) did NOT crash the market
During the longest shutdown in history, the S&P 500 still rose over 10%.
š FACT 4: Data delays increase volatility, but only for a short time
Shutdowns can delay CPI, jobs reports, and other key data ā and that can cause short-term market uncertainty.
š FACT 5: Gold & safe-haven assets can outperform briefly
When uncertainty rises, investors often shift into gold, Treasuries, and defensive assets, pushing prices up temporarily.
š FACT 6: Shutdowns alone do not trigger recessions
They can slow growth slightly while ongoing, but shutdowns historically havenāt caused recessions by themselves.
š§ THE REAL TAKEAWAY
A government shutdown is important, but it is not a market apocalypse.
It usually means:
ā”ļø Higher volatility
ā”ļø Risk-off rotation (temporary)
ā”ļø Markets waiting for clarity
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