The standoff ends, the feast begins? After 43 days of political crisis, timing is key when bottom-fishing in US stocks

On November 13, U.S. President Donald Trump signed a temporary funding bill, ending the longest government shutdown in U.S. history—43 days. The bill will provide continued funding for the federal government, allowing most government agencies to receive operational funds until January 30, 2026. The market reacted immediately. The S&P 500 has risen for three consecutive days.

But investors remain cautious: Is this just the end of political noise, or the prelude to a reversal in U.S. stocks?

There is a historical iron law: the stock market rallies after a shutdown. Since 1976, the U.S. government has shut down 22 times, and the data reveals a clear pattern:

Indicator	During Shutdown	12 Months After Shutdown
S&P 500 Average Return	+0.3%	+12.7%
Probability of Positive Returns	50% (conservative)	73%

A typical example is the 2018-2019 shutdown (35 days), after which the market surged 23.7%~36% in the following 12 months; the 2013 shutdown (16 days) saw a 19.7% gain in the subsequent year.

The underlying logic is the "catch-up" effect of the economy: Federal spending resumes, infrastructure and defense procurement accelerate, and key indicators like CPI and employment reports are released again, eliminating the "blind flight" panic. Risk appetite also rebounds as funds flow back from bonds and gold to stocks.

Currently, three major tailwinds are in place:

First, the deadlock is broken. Trump signed the temporary funding bill, officially ending the shutdown. Salaries for 8 million federal employees, SNAP food assistance, and backlogged economic data will gradually be addressed.

Second, the Fed's rate-cut path remains clear. The shutdown did not disrupt the easing trend, and the probability of a 50-basis-point rate cut in December remains as high as 68%.

Third, corporate earnings exceeded expectations. Q3 S&P 500 EPS grew 11.8% YoY, the highest since 2022. The "Magnificent Seven" tech giants accounted for 33% of profits, and AI capital expenditures continued to grow (Nvidia raised its Q3 guidance by 20%).

However, risks remain. The "twin cliffs" loom in January. While the bill provides temporary relief, it is only a stopgap measure.

Risk Point	Deadline	Potential Impact
Debt Ceiling	Automatically reinstated on January 1, 2026	Treasury's "extraordinary measures" can only last until mid-January
ACA Healthcare Subsidies	January 2026	Subsidies for 20 million low-income individuals may be cut, dragging on consumption

If Congress deadlocks again in January, U.S. stocks may experience a mixed performance.

Decode suggests bottom-fishing in stages and maintaining dynamic balance.

Investor Type	Recommendation	Specific Path
Long-term Investors	Add positions gradually	Buy SPY/VOO in batches if S&P falls to 6,700-6,800; stop-loss at 6,500
Short-term Traders	Wait for data confirmation	Monitor CPI re-release; if core inflation ≤2.6%, enter TQQQ quickly
Conservative Investors	Cash + Gold Hedge	40% cash, 1-3 month Treasuries, 5% gold ETFs

Focus on tech and financial sectors; avoid slow-recovering government contractors and lagging retail for now.

In short, bottom-fishing is possible, but timing is key. The end of the 43-day shutdown is not the finish line but the starting point. History shows that every political crisis clearance marks the beginning of a feast for risk assets. But this time, whether the feast continues depends on whether Congress can deliver a "passing grade" in January. What we need now is not blind chasing but precise timing: bottom-fishing in stages, data as the anchor; prepare for January, stay flexible.

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