US Stocks Rally as Schumer Backs GOP Spending Bill, Easing Shutdown Fears
The US stock market experienced a significant rebound on Friday, following a tumultuous week marked by concerns over President Donald Trump’s trade policies. Investors responded positively to news that Senate Minority Leader Chuck Schumer would support a Republican spending bill, reducing the likelihood of a government shutdown.
Major stock indices saw sharp increases in response to the developments in Washington, DC. The S&P 500 surged by as much as 2%, recouping some of its losses from earlier in the week, though it remained down 2.5% over the past five days. The Nasdaq Composite jumped 2.5%, while the Dow Jones Industrial Average gained nearly 700 points.
As of 1:30 a.m. ET Friday, market standings were:
- S&P 500: 5,620.97, up 1.8%
- Dow Jones Industrial Average: 41,416.27, up 1.5% (603 points)
- Nasdaq Composite: 17,684.32, up 2.2%
Schumer’s decision to back the GOP spending bill surprised many, given his initial pledge to oppose it. The move angered some Democrats but was welcomed by investors as it reduced market uncertainty. Schumer explained his change of stance, acknowledging that Democrats would have limited control over a potential shutdown scenario with Republicans holding the majority.
Despite the positive market reaction, economic indicators painted a mixed picture. Consumer sentiment reached its lowest level since 2022, influenced by ongoing tariff uncertainty and inflation fears and the week had been marked by a barrage of trade-related news that negatively impacted investor confidence and increased market volatility. Prior to Friday’s rally, the S&P 500 had entered correction territory, down 10% from its February 19 high.
In other market developments, gold prices reached a record high of $3,000 an ounce on Friday, indicating a flight to safety by investors. Treasury yields also dropped as market participants sought safer assets amid the volatility.
The Trump administration, represented by Treasury Secretary Scott Bessent, remained unconcerned about the market fluctuations, emphasizing their focus on the broader economy.
As markets closed on Friday, investors breathed a sigh of relief, though uncertainties surrounding trade policies and economic indicators continue to loom over the financial landscape.
