By Kyle S. Plotkin
Investment Advisor Representative
[email protected]
It’s hard to believe that we’re already three-quarters of the way through 2025. This year has flown by in what seems like an instant, despite much turmoil across the country, the economy, and the globe. As for the markets, Q3 marked the second consecutive positive quarter after a rough start to the year in Q1.
- The tech-heavy Nasdaq gained double digits in Q3, up 11.2% for the three-month period. At quarter’s end, it sits at a 17.3% year-to-date return—pretty impressive given that it lost more than 10% in the first quarter.
- The S&P 500 gained 7.8% in Q3 and is up 13.7% year-to-date through the end of September.
- The Dow continues to lag the other indexes but remains in positive territory, gaining 5.2% in Q3 and sitting at 9.1% year-to-date through nine months.
Nobody knows what the fourth quarter holds, especially as it begins with a government shutdown that started just after midnight on Tuesday. This is the 22nd shutdown in U.S. history since modern budgeting rules took effect in 1976.
What to Expect in the Shutdown
- Benefits: Social Security, Medicare, and Medicaid will continue sending out payments. However, new applications and certain changes may be delayed or suspended. SNAP (food stamps) payments will continue for now but could be affected if the shutdown drags on.
- Services: The post office will remain open because it’s self-funded. Some national parks are expected to remain open initially, but services like trash collection, restrooms, and visitor centers may close depending on how long the shutdown lasts. Of local interest, the Liberty Bell has been closed since Wednesday.
- Federal workers: The Congressional Budget Office estimates that around 750,000 federal employees could be furloughed. Many others will be required to work without pay until Congress passes a funding bill.
- Travel: Air traffic control and TSA will continue operating, though staffing shortages may lead to longer lines and delays. Plan accordingly if you are traveling. Passport and visa processing could also be delayed.
- Loan Processing: The Small Business Administration will stop processing most new business loans and loan guarantees. That can especially hurt small businesses looking for financing. Additionally, FHA and VA loans are often delayed because approvals require federal workers.
- IRS: During a prolonged shutdown, the IRS suspends audits and many customer service operations. Refunds and new filings may be delayed.
How Long Will It Last?
That depends entirely on Congress. The most recent shutdown, during Trump’s first term in 2018–2019, lasted 35 days—the longest in history. By contrast, 11 of the last 15 shutdowns lasted three days or less.
What About the Markets?
Market reaction to shutdowns has historically been mixed. The S&P 500 has only declined during 3 of the last 13 shutdowns. In fact, during the 2018–2019 shutdown, the S&P gained 9.3%. The worst performance came in 1979, when the market lost 4.4% during an 11-day shutdown.
One of the noticeable economic effects will be the delay of important government data. For example, the Bureau of Labor Statistics, which publishes the monthly jobs report, will be shut down. Investors, analysts, and policymakers will be left without key economic updates until funding is restored.
There have also been rumblings that the Trump Administration may use this shutdown to push for further government workforce reductions—similar to the DOGE cuts earlier this year. Whether that happens, and how strongly Democrats oppose it, remains to be seen.
In any case, let’s hope Congress can come to an agreement soon and get the government reopened.
At least the forecast is looking good for the weekend and the start of Phillies’ Red October. Go Eagles and Go Phillies.