Wall Street closed sharply higher on Monday, pulled up by tech and discretionary stocks. Investor mood was optimistic about the political will to bring the government shutdown to an end. AI-enthusiasm resurfaced with semiconductor stocks leading the market’s gains. All three benchmark indexes finished in the green.
The Dow Jones Industrial Average (DJI) rose 0.8%, or 381.53 points, to close at 47,368.63. Twenty components of the 30-stock index ended in positive territory, while 10 ended in the negative.
The tech-heavy Nasdaq Composite added 522.64 points, or 2.3%, to close at 23,527.17.
The S&P 500 gained 103.63 points, or 1.5%, to close at 6,832.43. Eight of the 11 broad sectors of the benchmark index closed in the green. The Technology Select Sector SPDR (XLK), the Consumer Discretionary Select Sector SPDR (XLY) and the Communication Services Select Sector SPDR (XLC) advanced 2.6%, 1.3% and 1% respectively, while the Consumer Staples Select Sector SPDR (XLP) declined 0.4%.
The fear gauge CBOE Volatility Index (VIX) decreased 7.8% to 17.6. A total of 17.9 billion shares were traded on Monday, lower than the last 20-session average of 20.8 billion. Advancers outnumbered decliners by a 1.7-to-1 ratio on the S&P 500.
Wall Street rallied on Monday as optimism grew that the prolonged U.S. government shutdown was nearing an end. Investors cheered reports that congressional leaders had reached a tentative bipartisan agreement to reopen federal agencies and extend funding through early 2026. The breakthrough followed weeks of political stalemate that had delayed key economic data releases, disrupted government services and eroded consumer and business confidence.
Market sentiment turned sharply positive after signs emerged that both parties were willing to compromise on spending levels and border security provisions, raising hopes of avoiding further fiscal damage. The news eased concerns about the economic impact of the shutdown, which had been weighing on investor morale and triggering volatility in recent weeks.
Equities, particularly in the technology and semiconductor sectors, surged as traders shifted back into risk assets. The PHLX Semiconductor Index (SOX) added around 3% in the session. The Nasdaq rebounded strongly after its steepest weekly loss in nearly seven months, and the S&P 500 and Dow Jones also advanced. The prospect of government operations resuming and delayed data releases recommencing soon restored clarity to the economic outlook. The progress in Washington signaled a potential turning point, bolstering confidence that fiscal stability could support continued corporate and market recovery heading into year-end.
