Stocks jumped Monday as a bipartisan deal to end the federal government shutdown gained traction in the Senate, though it lacked any clear resolution to expiring health care tax credits that Democrats have been fighting for.
Investor optimism for an end to the longest federal government shutdown in U.S. history buoyed the S&P 500 by 77 points, or 1.2%, to 6,806 in early Monday trading. The Dow Jones Industrial Average gained 320 points, or 0.7%, to 47,308, while the tech-heavy Nasdaq composite surged 1.8%.
Health insurers were among the losers early Monday as a lack of clarity on health care subsidies clouded their futures. Cigna shares dipped 1.7%, while Humana slipped 2%.
Sunday’s test vote marked the beginning of a series of procedural maneuvers aimed at passing a compromise bill to fund the federal government, although final passage could be several days away. The Senate may hold a vote by mid-December on extending expiring health care tax credits, the key sticking point.
Monday’s gains were led by a rebound in technology shares as investors’ alarm over the run-up in stock prices related to the craze for artificial intelligence appeared to calm.
“Progress on a deal to end the government shutdown looks like it could give the market an early-week boost,” said Chris Larkin, managing director of trading and investing at E*TRADE from Morgan Stanley, in an email.
He added, “But with a relatively light earnings calendar and continued economic data delays, sustaining any bounce may hinge on whether the market’s AI leaders regain momentum after last week’s setback.”
U.S. chipmaker Micron jumped more than 7% in early trading, while Seagate Technology rose about 5%.
Wall Street remains focused on the latest quarterly reports and forecasts from U.S. companies.
More than 90% of companies within the S&P 500 have reported earnings for their latest quarter. Most companies have reported growth beyond Wall Street expectations, while the influential tech sector has had the strongest growth, according to data from FactSet.
Corporate profits and forecasts were already being scrutinized by Wall Street as investors try to gauge whether the market’s overall high value is justified. The results have taken on more significance amid a lack of other data about the economy because of the U.S. government shutdown.
