The stock market, including the S&P 500 (SPX) index, is rising amid optimism about a potential resolution of the US government shutdown. On Sunday, the Senate proposed a measure aimed at breaking the 40-day deadlock, which caused significant disruptions. While markets may experience short-term relief, volatility triggered by news reports is likely to persist until the situation is fully resolved.
Even if the Senate passes the bill, it still needs to be approved by the House of Representatives and signed by President Donald Trump. This process could take several days.
The ongoing government shutdown is negatively impacting US GDP growth, with many federal employees—from airport staff to law enforcement and military personnel—experiencing delayed salaries. This situation is further complicated by the limited economic data released by national agencies, leaving the Federal Reserve (Fed) to navigate in the dark.
White House adviser Kevin Hassett said that the country's GDP in the fourth quarter could turn negative if the government shutdown drags on. Reports released on Friday showed that US consumer expectations at the beginning of November fell to their lowest level in almost three and a half years.
Nevertheless, overall risk sentiment stayed positive on Monday, with S&P 500 futures rallying. Traders are currently pricing in a 63% chance of a Fed rate cut in December.
The overall recommendation is to buy SPX from the 6,750 level. Lock in profits at 6,880. Place Stop Loss at 6,690.
The volume of the open position should be calculated so that the potential loss (protected by a Stop Loss order) does not exceed 1% of your deposit. If your account balance does not allow opening a position of this size, it is better to avoid entering the market on this signal and wait for other trade options that meet low-risk criteria.
This content is for informational purposes only and is not intended to be investing advice.
