Weekly Buzz: The longest US government shutdown versus your portfolio

The US government shutdown has ended after 43 days, making it the longest in American history. So, how did it affect your investment portfolio?

Markets didn't wait around

The political stalemate came to an end on Thursday after the US Congress passed a funding bill. Markets responded before Washington could finish the paperwork: the Nasdaq rebounded 2.3% and the S&P 500 posted its best daily gain in almost a month when news of the bill first broke on Monday.

However, the Congressional Budget Office estimates the shutdown could have already cost between US$7–14 billion in lost GDP for the country. So why did markets still rally on the news? Because investors know how to separate temporary political drama from economic fundamentals.

According to Morgan Stanley, the S&P 500 has gained an average of 4.4% during government shutdowns and remained in positive territory during the last five shutdowns. Markets know these standoffs eventually resolve, and the forces that drive long-term returns – corporate earnings, central bank policy, economic growth – keep moving regardless of what happens in Washington.

The bigger issue for investors has been the data blackout. Most US economic data reports have stopped during the shutdown, leaving markets without key information on jobs and consumer spending. Once the government reopens, expect that information on jobs and consumer spending to flood back.

What’s the takeaway here?

Markets are surprisingly good at pricing in political uncertainty and moving past it. Your portfolio's long-term performance depends far more on staying invested through these episodes than trying to dodge every headline out of Washington, Beijing, or anywhere else.

(Investing strategically across a mix of markets and assets keeps your portfolio resilient. For a portfolio that’s already built with diversification in mind, check out General Investing.)

In Other News: China surprised with its inflation numbers

China's consumer prices rose 0.2% in October after two months of declines, beating expectations for another drop. Food prices helped lift the headline number, and core inflation climbed to a 20-month high. After flirting with deflation for months, the economy is showing some signs of life.

The details matter, however. Much of October's bump came from holiday travel during Golden Week – China's week-long national holiday – which makes it harder to separate seasonal effects from genuine demand growth. Economists still expect only modest inflation ahead, around 0.9% in 2026.

The risk for China is getting stuck in what analysts call "lowflation" – a cycle of low growth paired with low inflation. Without stronger policy support, the economy could stay trapped there. A sluggish China means less demand for goods worldwide and slower momentum for firms exposed to Chinese consumers.

One month doesn't make a trend, but it's a start. China's economy is showing signs of steadying after a prolonged deflationary period. For investors with global portfolios, that means keeping an eye on how much stimulus Beijing is willing to provide.

(For an easy way of investing in China’s long-term growth story, check out ETF Explorer.)

Simply Finance: Lowflation

Lowflation sits between healthy inflation and outright deflation. Deflation means prices are falling, which sounds good until people delay purchases waiting for things to get cheaper. That can result in economies getting stuck: consumers keep their wallets closed, demand slows, and wages stay flat.