Insights

How Government Shutdowns Affect Markets and the Economy

October, 2025

Every so often the news cycle gives us something that can feel unsettling, and right now it’s the talk of the October government shutdown. It’s only natural to wonder how this might affect your investments.

Here’s some helpful perspective: Since 1981, there have been 11 government shutdowns. Most ended within just a few days. Of the four that stretched longer than five days, the U.S. stock market actually ended higher in three of them and was flat in the other. In other words, while shutdowns can be frustrating, history shows they haven’t been a reason for long-term investors to panic.

A few things worth keeping in mind:

  • Markets have a strong track record of pushing through periods of uncertainty.
  • Shutdowns are temporary events—not permanent changes to the economy or markets.
  • Our strategy is built for the long term and doesn’t depend on predicting headlines.

This isn’t about politics or taking a side. It’s simply about looking at the evidence and remembering what history has taught us: Staying disciplined works better than reacting to short-term noise.

If you would like more insights about how markets have reacted in past shutdowns, we would encourage you to watch this short video from Focus Partners’ Jason Blackwell, CFA.

We’re always here if you’d like to talk through this further.

 

Source: “Stocks Can Still Go Up When the Government Shuts Down,” Wes Crill, PhD, Dimensional Fund Advisors, October 2025

For informational and educational purposes only and should not be construed as specific investment, accounting, legal, or tax advice. Certain information is based upon third party data which may become outdated or otherwise superseded without notice. Third party information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. Neither the Securities and Exchange Commission (SEC) nor any other federal or state agency have approved, determined the accuracy, or confirmed the adequacy of this article.