Government Shutdown Resolution: Market Rally Already Underway as Reddit Traders Lag Behind News

Reddit traders on r/StockMarket and related subreddits are actively debating whether the House-passed government reopening bill will trigger a market rally, with several key themes emerging:

• Priced In Concerns
  : Many users argue the government reopening news is already priced in and won’t cause a significant rally
• “Sell the News” Warnings
  : Several traders caution about a potential “sell the news” reaction after recent gains
• Short-Term Expectations
  : Some anticipate a brief bounce tomorrow but expect reversals by Friday
• Sector-Specific Bets
  : Comments mention positioning in MSFT calls, insurance sector bullishness, and Russell small caps
• Futures Indicators
  : Traders note flat futures, dampening immediate rally expectations
• Rotation Debate
  : Discussion centers on whether broader rotation back to tech is needed to sustain gains

The government shutdown resolution is already complete, with significant market implications:

• Resolution Complete
  : The House passed the bill 222-209 on November 12, 2025, and Trump signed it into law that same evening, ending the longest U.S. government shutdown in history at 43 days
• Funding Extension
  : The legislation extends government funding through January 30, 2026, and includes three full-year appropriations bills
• Historical Performance
  : S&P 500 historically averages 1.2% and 2.9% gains in one- and three-month periods following government shutdown resolutions
• Current Rally
  : Major indices are already experiencing relief rallies - S&P 500 up 1.5%, Nasdaq up 2.3% on resolution optimism
• Resilience Demonstrated
  : During the current 42+ day shutdown, S&P 500 gained 2% since October 1, showing market resilience throughout
• Global Impact
  : Emerging market equities and commodities (gold +3.2%, oil +4.1%) are benefiting from risk-on sentiment

There’s a significant information gap between Reddit discussions and market reality. While Reddit traders debate whether markets will rally upon Trump’s signature, the President already signed the bill on November 12. The market rally they’re anticipating is already underway, with futures slipping slightly on November 12 as the resolution became imminent - suggesting partial pricing in of the news.

Historical precedent strongly supports sustained gains following shutdown resolutions, with the 2018-2019 shutdown (35 days) resulting in a 10.82% S&P 500 gain. Current market action aligns with this pattern, though Reddit skepticism about the rally’s sustainability may prove warranted given some gains appear already priced in.

• Historical patterns suggest additional upside potential through January 2026
• Sector rotation opportunities, particularly in tech and small caps
• Commodity exposure through gold and oil benefiting from risk-on sentiment

• “Sell the news” reactions as Reddit traders anticipate
• Overextension if gains are already fully priced in
• Short-term volatility as market digests the resolution

The market appears to be ahead of retail sentiment, with institutional positioning likely driving the current rally while Reddit traders lag behind the actual news timeline.