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Fifteen hours into a government shutdown — just after 3pm Eastern as I write this — and the market’s message is pretty simple: it doesn’t care.
Here’s why. When Washington “shuts down,” a lot of the scary headlines miss the fine print: essential functions keep running. Markets know that. So instead of panic, we got something close to a shrug — and then some…
The S&P 500 hit a new all-time high.
And gold hit a new all-time high, too.
On the very day the government shut down.
That’s the market telling you, “no harm, no foul… at least for now.”
It’s not a political statement… it’s just money reacting to what actually changes (or doesn’t) in the near term. With essential services open, a shutdown often looks more like noise than a true economic shock, and money flows where it sees strength. Today, that was mega-cap equities and metals.
On the other side of the ledger: crude and gasoline fell.
Today’s inventory data ran well above expectations, which means there’s more supply than traders were looking for. And more barrels in storage means less urgency to bid prices up.
Two quick takeaways there:
- Gasoline is the cheapest it’s been since April and not far from last year’s low. That’s a real-world relief point for consumers if it sticks.
- Crude backing off on big inventories is exactly what you’d expect. If demand isn’t outpacing supply, prices cool.
So how am I reading it?
1) Equities: New highs on a shutdown day say buyers are still in charge. That doesn’t mean we go straight up forever — just that dip-buyers are alive and well.
If you sat out the headline risk (like I suggested yesterday), that’s fine. Better to be late than wrong. Now it’s about waiting for clean pullbacks and buying strength that holds rather than chasing the first spike you see.
2) Gold: New highs confirm the uptrend. When gold refuses to blink in the face of political drama and still pushes higher, that’s strong character. I keep a core long bias here and use dips to add with tight risk.
3) Energy: Oversupplied for the moment. I’m not trying to catch a falling knife in crude or gasoline until we see inventories tighten or price find real support. If retail gas keeps easing, that can help sentiment and certain consumer pockets — but that’s a story for later, not a reason to fight the current move.
4) Shutdown headlines: The market just told you how it feels. Could the tone change if the shutdown drags on or bleeds into data releases? Sure. But until something truly impacts earnings, employment, or credit markets, price action is more important than headlines.
Stick to your plan. Buy strength on constructive pullbacks, keep risk defined, and don’t let headlines talk you out of what the chart is already telling you.
Stay sharp,
— Geof
