Times of investing

October 1, 2025

As midnight struck on October 1, 2025, the United States plunged into its first government shutdown in six years, marking the end of a contentious political standoff in Congress over funding bills. With non-essential federal operations halted and hundreds of thousands of workers furloughed, the immediate economic fallout includes delayed payments, suspended services, and a cloud of uncertainty hanging over global markets. For investors, this isn’t just political theater—it’s a test of resilience in portfolios heavy on equities, precious metals, cryptocurrencies, and more.

While shutdowns are often short-lived, history shows they can amplify volatility, boost safe-haven assets, and occasionally drag on growth. Drawing from past episodes like the 35-day 2018-2019 impasse and the 16-day 2013 closure, let’s break down the emerging impacts on key asset classes. As of early trading on Wednesday, stocks dipped, gold soared to all-time highs, silver rallied, and bitcoin treaded water amid delayed economic data.

Stocks: A Temporary Jolt, But History Favors Recovery

Equity markets have long treated government shutdowns as speed bumps rather than roadblocks. Since 1976, the S&P 500 has averaged essentially flat performance during shutdown periods, with no net change over the 20-plus instances recorded. In fact, data from the past decade paints an even rosier picture: the benchmark index has climbed an average of 0.3% during shutdowns, and surged about 12% in the 12 months following resolution.

The longest modern shutdown—from December 2018 to January 2019—saw Wall Street not just survive, but thrive, with the S&P 500 posting gains despite the chaos. Five of the 10 shutdowns since 1981 coincided with broader market pullbacks of 5% or more, yet recoveries were swift once funding resumed.

Today’s reality echoes this resilience with a twist. U.S. stocks retreated in early sessions as the shutdown took effect, with the Dow Jones Industrial Average and S&P 500 both down around 0.5-1% in pre-market trading. Analysts at firms like Morgan Stanley and Bank of America warn of short-term pressure from delayed economic reports, such as jobs data, which could erode confidence. A prolonged closure might shave 0.1-0.2 percentage points off GDP growth per week, indirectly weighing on corporate earnings.

For investors, the playbook is clear: stay diversified and avoid knee-jerk sells. Shutdowns have been positive half the time during the event itself, and overwhelmingly so three to six months out.

Precious Metals: Gold and Silver Shine as Safe Havens

In times of fiscal dysfunction, investors flock to tangible assets that weather political storms. Gold, the ultimate safe-haven play, wasted no time capitalizing on the 2025 shutdown jitters.

Spot gold rocketed to a fresh all-time high of $3,875.32 per ounce early Wednesday, before settling around $3,862, up over 1% on the day. This surge builds on a month of successive records, fueled by shutdown fears and dovish signals from the Federal Reserve on potential rate cuts. Futures even touched $3,903.45, underscoring the metal’s appeal amid U.S. dollar weakness and global uncertainty.

Historically, gold’s response has been mixed but upward-biased. During the 2013 shutdown, prices initially climbed before dipping mid-way, only to rebound sharply as resolution neared. The 2018-2019 episode saw steady gains, with investors piling in as the stalemate dragged on. A drawn-out 2025 scenario could weaken the economy further, pressuring the dollar and inviting more Fed easing—both tailwinds for gold.

Silver, often the “poor man’s gold,” is riding the same wave but with added industrial zest. Spot prices rallied to $47.05 per ounce, up 0.9% Wednesday and hitting four-year highs near $47.00 ahead of the deadline. While overbought on technicals, silver benefits from safe-haven flows and its dual role in electronics and solar tech. Unlike gold’s pure defensive posture, silver’s volatility could amplify if the shutdown disrupts supply chains.

Emerging markets may feel the pinch from a softer dollar, but precious metals look poised for continued bids if dysfunction persists.

Bitcoin: Volatility Spikes, But ‘Digital Gold’ Narrative Persists

Cryptocurrencies, ever the wild card, face a double-edged sword from government gridlock: delayed data fuels swings, but bitcoin’s “store of value” aura could draw inflows.

BTC stalled its recent rally, trading in a tight range above $114,000 after dipping 2.9% in the prior 24 hours. Traders are on edge over postponed releases like employment figures, critical for gauging Fed moves—without them, bitcoin risks “downside shocks” from eroded sentiment. A prolonged shutdown could heighten this volatility, as seen in 2018-2019 when BTC fell 6% from $3,802 to $3,575 amid the 35-day freeze.

Yet, not all views are bearish. As fiat systems falter, bitcoin’s decentralized appeal shines; a extended impasse might spark renewed interest as an inflation hedge outside government control. Ether and XRP echoed the dip, underscoring broader crypto sensitivity to macro risks. ChatGPT-like models flag direct non-impact on blockchain ops, but indirect ripples via liquidity and confidence are real.

For crypto holders, this is a reminder: HODL through the noise, but hedge with stables if data droughts drag on.

Investor Takeaways: Prepare, Don’t Panic

The 2025 shutdown underscores a timeless truth: markets abhor uncertainty, but they’ve tamed worse. Stocks may wobble short-term but rebound historically; gold and silver offer ballast as havens; bitcoin tests its mettle amid chaos. Prolonged closure risks deeper economic dents, but resolutions have always come—often boosting risk assets post-crisis.

At Times of Investing, we advise: Review your allocations, prioritize liquidity, and eye opportunities in dips. Whether you’re stacking sats or sovereigns, resilience is the real bull market. Stay tuned as this unfolds—because in investing, timing the storm is less vital than dancing in the rain.