Markets Surge Higher Despite Shutdown Anxiety\u00a0Fire<\/h2>\n
\n \t\tOctober 1, 2025 at 2:25 pm<\/a><\/em>\n\t\t \t\t \t\t<\/p>\n Wars rage on in Ukraine and Gaza, political violence is on the rise at home, tariff-driven inflation remains debated, and anxiety over a looming government shutdown is intensifying. On the surface, this might sound like the perfect recipe for a market meltdown. But Wall Street seems unfazed. In fact, U.S. equities pushed to new record highs again this month, continuing the bull market\u2019s relentless advance in the face of these concerns.<\/p>\n Here is a market performance snapshot for the month:<\/p>\n What\u2019s fueling the optimism?<\/strong><\/p>\n \u2022\u00a0A Strong Economy:\u00a0<\/strong>The economy just produced a final +3.8% GDP growth for the 2nd quarter, and the Atlanta Federal Reserve is forecasting an even stronger economy for the 3rd quarter of +3.9% (see below<\/mark><\/strong><\/a>).<\/p>\n \u2022\u00a0Robust Corporate Earnings:<\/strong>\u00a0S&P 500 corporate profits surged by\u00a0+11.8%<\/mark><\/strong><\/a>\u00a0in the 2nd quarter and consensus estimates call for 3rd quarter\u00a0growth of <\/a>+7.9%<\/mark><\/strong><\/a>. Historically, CEOs tend to set conservative forecasts, therefore actual results often exceed low-bar expectations.\u00a0Therefore, it\u2019s very possible that Q3 earnings growth could achieve double-digit growth levels once again.<\/p>\n \u2022\u00a0A.I. Drive Still Alive:\u00a0<\/strong>With trillions of dollars in A.I. spending plans already announced, hungry investors once again gobbled up A.I. tech stocks last month. For instance, Oracle Corp\u2019s (ORCL) stock jumped +24% for the month in large part driven by a $317 billion increase in backlog orders during the company\u2019s first fiscal quarter. Reportedly, the majority of the massive increase in orders came from one customer, OpenAI \u2013 the brains behind the A.I. juggernaut, ChatGPT. The rise in Oracle\u2019s share price temporarily propelled CEO Larry Ellison past Tesla\u2019s (TSLA) CEO Elon Musk as the world\u2019s richest person, before markets began critically questioning whether OpenAI\u2019s CEO (Sam Altman) can ultimately fund the hundreds of billions of dollars in Oracle commitments.\u00a0<\/p>\n Source:\u00a0<\/strong>Atlanta Federal Reserve<\/em><\/p>\n Shutdown Jitter History<\/strong><\/p>\n Market anxiety has shifted from a hypothetical government shutdown nightmare to a scary reality, given the funding deadlines have already lapsed. Many investors are asking what this means for stocks. Fortunately, government shutdowns are nothing new. Our country has flourished over the last 50 years despite experiencing around two dozen shutdowns, many of which only lasted a few hours, a few days, or a few weeks.\u00a0According to Kiplinger<\/strong><\/a>, since the 1970s, the stock market has averaged a +0.3%\u00a0return during shutdown periods (see chart below).<\/p>\n Source:<\/strong>\u00a0Kiplinger<\/em><\/p>\n In fact, the longest shutdown on record occurred most recently from December 2018 to January\u00a02019 (35 days during President Trump\u2019s first term) and resulted in a sharp +10%\u00a0gain (see chart below<\/mark><\/strong><\/a>).<\/p>\n Source:<\/strong>\u00a0Kiplinger \/ YCharts<\/em><\/p>\n The partisan finger-pointing will continue, but history suggests that shutdowns are short-term noise with little bearing on long-term market direction. Long-term investors understand there is never a shortage of concerns during bad times (e.g., potential recessions, job losses, credit defaults, bankruptcies, etc.), or good times as well (e.g. fear of inflation, restrictive monetary policy, politics, etc.). Turning off the TV is often the best course of action (see also \u2013\u00a0Turn Off the TV<\/mark><\/em><\/strong><\/a>).<\/p>\n What\u2019s Next? Looking Ahead<\/strong> After more than 30 years of investing\u2014including weathering the dot-com tech sense of purpose collapse in 2000\u2014I\u2019ve learned that markets always have a tendency of climbing a wall of worry, so it\u2019s better to not react emotionally to daily news headlines. Rather, it\u2019s better for investors to stay focused on those market leading, innovative companies and concentrate on those sectors experiencing long-term secular trends.<\/p>\n As we enter Q4 and head toward 2026, A.I. remains the defining theme. Since the launch of ChatGPT in November 2022, the S&P 500 has surged +24% in 2023, +23% in 2024, and +14% so far in 2025. Unfortunately, trees do not grow to the sky forever.<\/p>\n At\u00a0Sidoxia Capital Management<\/mark><\/strong><\/a>, we understand that valuations currently are stretched on a historic basis and that markets never move in a straight line. As a result, a correction at some point in stock prices should not come as a surprise to anyone. Nevertheless, whether you\u2019re bullish on the productivity gains from large language models (LLMs) or skeptical of over-investment and hype, one thing is clear: A.I. is here to stay, and it doesn\u2019t matter if you believe the government shutdown flames will grow into an inferno or fizzle out in smoke, which is usually the case.<\/p>\n www.Sidoxia.com<\/mark><\/strong><\/a><\/p>\n Wade W. Slome, CFA, CFP\u00ae<\/strong><\/p>\n Plan. Invest. Prosper.<\/em><\/p>\n This article is an excerpt from a previously released Sidoxia Capital Management complimentary newsletter (October 1, 2025). Subscribe Here<\/strong><\/mark><\/a> to view all monthly articles.<\/p>\n DISCLOSURE:\u00a0Sidoxia Capital Management (SCM) and some of its clients hold positions in ORCL, TSLA, and certain exchange traded funds (ETFs), but at the time of publishing had no direct position in any other security referenced in this article. No information accessed through the Investing Caffeine (IC) website constitutes investment, financial, legal, tax or other advice nor is to be relied on in making an investment or other decision. Please read disclosure language on IC\u00a0Contact page<\/a>.<\/p>\n \n\t\t\tEntry filed under: Behavioral Finance<\/a>, economy<\/a>, Education<\/a>, Financial Markets<\/a>, Government<\/a>, Politics<\/a>, Stocks<\/a>, Trading<\/a>. Tags: A.I.<\/a>, ai<\/a>, artificial intelligence<\/a>, bear market<\/a>, bull market<\/a>, collapse<\/a>, economy<\/a>, government shutdown<\/a>, investing<\/a>, Politics<\/a>, recession<\/a>, shutdown<\/a>, Sidoxia<\/a>, stock market<\/a>, Stocks<\/a>, strong economy<\/a>, Wade Slome<\/a>, weak economy<\/a>.\t\t<\/p>\n<\/p><\/div>\n\n","protected":false},"excerpt":{"rendered":" Markets Surge Higher Despite Shutdown Anxiety\u00a0Fire October 1, 2025 at 2:25 pm Wars rage on in Ukraine and Gaza, political violence is on the rise at home, tariff-driven inflation remains debated, and anxiety over a looming government shutdown is intensifying. On the surface, this might sound like the perfect recipe for a market meltdown. But […]<\/p>\n","protected":false},"author":1,"featured_media":343601,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[96],"tags":[2222,1074,11029,11715,17962,13714],"dealstore":[],"offerexpiration":[],"class_list":["post-343599","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing","tag-anxiety","tag-fire","tag-higher","tag-markets","tag-shutdown","tag-surge"],"yoast_head":"\n![\"\"](\"https:\/\/investingcaffeine.com\/wp-content\/uploads\/2025\/10\/fire.jpg?w=468\")
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