Dow Jones gains 400 points, Nasdaq outperforms as hopes of shutdown ending rise

US indices began the new trading week on a strong note as hopes of the 42-day US Government shutdown coming to an end increased.

The Dow Jones gained over 400 points as investors turned towards risk assets, the S&P 500 gained 1.5%, while the Nasdaq led the gains with an advance of over 2%, recovering most of last week's AI valuation-led drubbing.

Gains were led by shares of Nvidia and Broadcom. Microsoft also snapped an eight-day losing streak, the longest since 2011, ending with gains of 2%.

Monday saw the US senate agree on a principal mechanism that allows voting on the bill to end the shutdown. The process received the required 60 minimum votes after eight democrats voted in favour of the bill.

The bill will still see a final vote in the Senate, before it moves to the House for passage likely by Wednesday. US President Donald Trump has also affirmed that he will support the deal, provided the contours are exactly the same as what he has heard.

While the deal does not include an extension of the Affordable Care subsidies, a key bone of contention with the Democrats, it allows for a vote on the same in December. The deal includes funding the government till January 31, 2026 and reversal of some of the mass Federal layoffs.

“Reopening would not only boost sentiment, but also open the way for data releases, which could provide more insight into the health of the US jobs market and, more broadly, the US economy ahead of next month’s Federal Reserve interest-rate decision,” said Fiona Cincotta at City Index.

Prospects of re-opening has shifted the focus back to the US Federal Reserve. Newly appointed Governor Stephen Miran said that the Fed should reduce rates by 50 basis points, which would be appropriate, during its next policy meet on December 10, and if not, at least by 25 basis points. Gold prices were back above $4,100 an ounce on Monday on hopes that the rates will be cut by the FOMC in December as well.

US Bond Markets will remain shut on Tuesday for Veterans Day.

Even if the government reopened on Friday, it would take a number of weeks before the market received all the data that has been delayed since the beginning of the government shutdown, according to Vail Hartman, Delaney Choi and Ian Lyngen at BMO Capital Markets.

“Moreover, concerns regarding government data quality will likely persist into 2026, leaving the private data of heightened relevance to near-term monetary policy expectations for the foreseeable future,” they said.

(With Inputs From Agencies.)