Nearing an End to the Government Shutdown
November 10, 2025
Clocks were not the only thing falling back the first week in November. Risk assets were weaker most of the week,1 although markets found their footing on Friday afternoon as optimism grew around a potential end to the government shutdown. Government reopening headlines seesawed equities on Friday;2 however, the main takeaway is that we are closer to ending the longest U.S. government shutdown in history. Corporate bond spreads widened slightly as companies raised funds for artificial intelligence (AI) capital expenditures through the bond market.3 Corporate spreads at 82 basis points remain near the 2025 average.4 The Nasdaq Composite Index led equities lower due to concerns regarding AI valuations and an unexpectedly negative job cuts report from Challenger, Gray & Christmas, which marked the weakest October reading in over two decades.5
The report's layoffs alone may be misleading, as Challenger's hiring data showed a notable non-seasonally adjusted increase.6 When considering both hiring and layoff announcements, the outlook is less concerning. ADP and Revelio reports were also more positive.7,8 While the University of Michigan Sentiment Index fell to 50.3 (the second lowest reading in 40 years), the S&P 500 Index has returned approximately 20% annually since the only lower reading in June 2022.9
The week ahead will be light on economic data releases due to the continued government shutdown. However, the Senate has moved forward with a plan to end the shutdown, and a reopening may happen this week. We have passed peak earnings season, but key earnings reports will continue to garner attention. The CoreWeave earnings report scheduled for Monday is likely to attract attention, given the ongoing focus on developments related to AI.10 Several Federal Reserve officials are set to deliver remarks this week, including Governor Barr on Tuesday and Governors Waller and Miran on Wednesday.11
Sources:
1,4,8,9Bloomberg
2,5CNBC – Nasdaq closes lower, capping its worst week since April; 11/7/25
3Federal Reserve Bank of St. Louis – ICE BofA US Corporate Index Option-Adjusted Spread; as of 11/10/25
6Challenger, Gray & Christmas, Inc – Job Cut Announcement Report; 11/6/25
7CNBC – Private payrolls rose 42,000 in October, more than expected and countering labor market fears, ADP says; 11/5/25
10Yahoo! Finance – CoreWeave Faces Earnings Pressure as Cracks Appear in AI Trade; 11/10/25
11MarketWatch – U.S. Economic Calendar; as of 11/10/25
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