U.S. assets found firmer footing Monday as signs of progress in Washington eased fears of deeper economic fallout from the nation’s longest-ever government shutdown. Equities clawed back part of last week’s losses—led by a rebound in big-cap technology—while risk-sensitive currencies strengthened and Treasury prices slipped, nudging yields higher.

The improved tone followed a Senate compromise to advance legislation that would reopen federal agencies and end disruptions that began on October 1. While the final vote and presidential sign-off remain pending, markets welcomed the prospect of a near-term resolution, particularly with the holiday season approaching and investors increasingly worried about pressure on travel and consumer spending.

Liquidity and sentiment: early relief

Beyond equities, the risk reset showed up across funding and FX markets. The Australian dollar firmed alongside other pro-growth currencies, reflecting a modest revival in risk appetite. A shutdown resolution is also expected to ease recent strains in short-term funding: repo rates had been drifting higher amid reduced collateral processing and quarter-end–like frictions. Reopening should help normalize flows and improve money-market liquidity.

Still, the rally is tentative. Last week’s slide in consumer sentiment to a near 3½-year low underscored the uncertainty that had been building as the shutdown dragged on. A durable recovery in risk assets likely requires clearer evidence that growth and earnings expectations can withstand recent macro headwinds—and that AI-exposed equity valuations can be supported by delivery rather than hope.

“Bring on the data”: clearing the fog

The most immediate market catalyst from reopening is the return of critical federal statistics. With the government’s data pipeline frozen for weeks, investors and the Federal Reserve have been operating with limited visibility on labor, inflation, production, and spending.

Economists expect September releases—such as nonfarm payrolls—to hit relatively quickly once agencies restart, given they were close to publication when the shutdown began. A restored data flow could break the impasse in rates pricing ahead of the December 10 FOMC decision. Chair Jerome Powell signaled last month that a lack of data could make policymakers more cautious about easing. As of Monday afternoon, futures implied roughly a 63% probability of a 25 bp cut, with incoming prints likely to sway that odds-path.

What to watch next

• Shutdown timeline: Speed of House passage and White House approval, plus the timing of agency reopenings and data rescheduling.
• Labor and inflation prints: September payrolls, CPI/PCE sequencing, and any revisions that reshape the growth-inflation narrative.
• Funding conditions: Normalization in repo and bill markets as collateral processing resumes.
• Earnings follow-through: Whether the tech rebound holds as guidance meets (or resets) elevated expectations.

Bottom line

An end to the shutdown removes a major overhang, improves liquidity, and restores the information set that drives macro and policy decisions. Near term, that should support a firmer risk tone. But with valuations still sensitive and the growth outlook untested by fresh data, the next leg for markets will hinge less on relief—and more on what the numbers say.