Dow Jones up as US Congress reaches deal to avoid government shutdown

Wall Street is pleased with the news that the US Congress has tentatively reached a deal to avert a government shutdown. The Dow Jones has risen by as much as 200 points in trading after the news.

Why is the Dow Jones up now?

The Dow Jones is up after lawmakers in Congress reached an agreement ‘in principle’ to a compromise on funding for a proposed wall along the US-Mexico border. Republicans and Democrats agreed to build a type of fencing between the two nations to try to deter undocumented immigration. They also approved a reduction in the number of undocumented immigrants detained by the Immigrations and Custom Enforcement (ICE) agency.

While the pact has yet to be approved by US President, Donald Trump, Wall Street is still relieved about the potential deal. There is also optimism about a possible US-China trade agreement. Societe Generale’s Global Strategist, Kit Juckles, wrote that investors feel more comfortable taking risks now that there are some concessions in those volatile issues.

‘The US government shutdown seems to have been averted and there’s a strong chance that import tariffs on Chinese goods will be postponed. Risk is on,’ wrote Juckles.

Will the US stock market rally last?

While the Dow Jones is up now, the surge in stocks may not last if the US-China trade negotiations fall through or the US government shutdown happens again. Ironically, Trump who is not known to compromise, may have to find common ground on both issues to keep Wall Street happy. Chris Rupkey, chief economist at MUFG Union Bank in New York, wrote that the US stock market could benefit from Trump negotiating more with his political rivals.

'The market has been held back by uncertainty from a potential second federal government shutdown and questions about the U.S. trade talks with China. But we are entering the next presidential election cycle in 2020, and we expect the Trump administration will find more reasons to compromise at least on economic issues than they have in the last couple of years,’ wrote Rupkey.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Take a position on indices

Deal on the world’s major stock indices today.

  • Trade the lowest Wall Street spreads on the market
  • 1-point spread on the FTSE 100 and Germany 30
  • The only provider to offer 24-hour pricing

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.


Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.