Stocks closed higher on Monday after Senate lawmakers took a critical step towards a potential deal to end the historic U.S. government shutdown.
The Dow Jones Industrial Average climbed 381.53 points, or 0.81%, to end at 47,368.63. The S&P 500 gained 1.54% to settle at 6,832.43, while the Nasdaq Composite advanced 2.27% to finish at 23,527.17.
Nvidia, Broadcom and other artificial intelligence bull market leaders led the gains as a possible end to the shutdown put investors in a risk-taking mood again. Microsoft shares also rose 1.9%, snapping an eight-day losing streak — its longest daily slide since 2011. Those stocks led the broader market lower last week as those on Wall Street grew worrisome about elevated valuations in the AI trade.
Investors continue to monitor lawmakers' negotiations to pass a federal funding bill that would end a shutdown.
A procedural measure that allows other votes on the agreement to be held on Monday was approved by a minimum of 60 yes votes, after eight senators in the Democratic caucus broke with party leadership to support the deal.
The deal being would reopen the government into January and reverse some of the recent mass federal layoffs. It also includes future protections for government workers. The agreement does not include an extension of Affordable Care Act subsidies, a key sticking point for most Democrats, but it would call for a vote on the subsidies in December.
A final vote in the Senate on the funding bill will need to be held, followed by passage by the House. House Speaker Mike Johnson, R-La., has already urged the chamber's members to start traveling to the nation's capital in order for a vote to happen as soon as possible on the deal, which he expects to take place at some point this week.
Fears over the shutdown have driven consumer sentiment to its lowest level in more than three years, just above its worst-ever, according to a University of Michigan survey released on Friday. Due to the closure, federal agencies are no longer releasing many key economic reports, including the consumer and producer price indexes, which were scheduled for release this week.
"It's been a bumpy November for risk assets," Tim Holland, chief investment officer at Orion, said to CNBC, citing investors' anxiety toward the shutdown in addition to valuations and a possible AI bubble as a key driver of the recent downbeat sentiment.
In the past week, the tech-heavy Nasdaq saw its worst week since the tariff-driven sell-off in April, losing roughly 3%. Both the S&P 500 and the 30-stock Dow shed more than 1% in the weekly period.
"The concerns last week were reasonable, but I think we've at least taken one of those three concerns out of the picture, and I think that's a big deal," he added. "If you think about the government reopening, the One Big Beautiful Bill Act, probably 13% year-on-year earnings growth and seasonality being a tailwind, we're still pretty optimistic on the economy and on risk assets into year-end."
