The political gridlock has finally broken. The US Congress has officially voted to reopen the federal government, providing an immediate positive catalyst for equities that is erasing the market blues of the past week.
The longest-ever government shutdown initially had a muted impact, but as its consequences—such as delays in key economic data, reduced flights, and halted essential functions—began to accumulate, markets took a noticeable negative turn last week.
However, the Senate’s decisive vote on a compromise bill, which saw moderate Democrats break with their party leadership to make key concessions (such as securing a future vote on extending healthcare subsidies), has fueled today’s optimism.
Participants are interpreting that a Republican sweep is expected to be an…
The political gridlock has finally broken. The US Congress has officially voted to reopen the federal government, providing an immediate positive catalyst for equities that is erasing the market blues of the past week.
The longest-ever government shutdown initially had a muted impact, but as its consequences—such as delays in key economic data, reduced flights, and halted essential functions—began to accumulate, markets took a noticeable negative turn last week.
However, the Senate’s decisive vote on a compromise bill, which saw moderate Democrats break with their party leadership to make key concessions (such as securing a future vote on extending healthcare subsidies), has fueled today’s optimism.
Participants are interpreting that a Republican sweep is expected to be an even greater booster for stocks.
Today’s sector dynamics are turning more bullish for tech-heavy firms: the market is green across all indices, heavily propelled by the “Magnificent Seven” stocks – notably Nvidia and Tesla, which are up by more than 3%.
Conversely, more defensive sectors (like consumer staples, medical, and home appliances) are lagging.
An anticipation of a “Buffett retirement effect” could be hitting defensive names, which Berkshire Hathaway has traditionally sought throughout Buffett’s tenure.
After a long and storied career, the 94-year-old value investing legend is expected to publish his official farewell letter today.
Elsewhere, Gold has rallied massively, while bonds have corrected.
This flow suggests that while the shutdown uncertainty is gone, the spotlight immediately pivots back to the deteriorating US fiscal outlook and the costs of the political concessions made to reopen the government, with Republicans dominating the outlook going forward.
This discomfort with fiscal sustainability continues to underpin the resilience of precious metals.
In any case, for now, the immediate action is bullish in US indices, but more so in the tech-heavy Nasdaq.
Let’s observe intraday charts and key technical levels for the Dow Jones, Nasdaq, and S&P 500.
Dow Jones 8H Chart and technical levels
Despite the bullish overnight session and open for the Dow, the rotation from defensive sectors is hurting the industry-heavy index.
Sellers are bouncing off of the 50-period MA and short-term descending topline which may provide resistance for upside progress as long as prices remain below.
With momentum also rejecting the neutral RSI mid-line, selling seems to be taking the hand as I speak.
Look for the daily close: Above 47,000, buyers remain in control of the long-run trends.
Below however, the past week of downside may have a longer drag.
As indicated in our end-week Index outlook,** for long-term investors, keep an eye on the 45,000 level to spot if the uptrend is prioritized.**
Dow Jones technical levels of interest:
Resistance Levels
- Current All-time high 48,090
- 8H MA 50 and resistance at 47,500
- Session high 47,340
- ATH Resistance Zone 47,900 to 48,100
Support Levels
- Higher timeframe pivot 46,900 to 47,200
- 46,400 major support
- 46,000 higher timeframe Pivot now support
- 45,000 psychological level
- 44,400 to 44,500
- 46,950 session lows
Nasdaq 8H Chart and levels
Despite the ecstatic overnight and opening trading, reactions to downside technical patterns (channel and 25,500 resistance) are leading to some downside.
Still, the actual index shows a strong gap higher and tech-leaders are pulling further in their lead.
A 2H 50-period MA is acting as immediate support and leading to some short-term buying.
Bulls will have to break and close above the 25,580 session highs to prompt further upside – Bears on the other hand will want a break below 25,365.
Nasdaq technical levels of interest:
Resistance Levels
- Current ATH 26,283 (CFD)
- All-time high resistance zone 26,100 to 26,300
- Intermediate resistance and 4H MA 50 25,700 to 25,850
- Mini-resistance at 25,500 Gap (immediate resistance)
- Session highs 25,580 and Channel top
Support Levels
- Current Pivot 25,050 to 25,200 (Tuesday lows 25,186)
- 24,500 intermediate support
- October lows 23,997
- Early 2025 ATH at 22,000 to 22,229 Support
- Session Lows 25,450
S&P 500 8H Chart and level
There has been some short-term rejection at the topline but some dip-buying has helped an initially-bearish candle to turn more neutral.
Similarly as the other indices, the S&P 500 is reacting to some immediate resistance but with the current breadth of the rally, the S&P 500 looks relatively more solid than its peers.
Nevertheless, market mood spreads throughout all indices, therefore today’s close will be important to check.
After the gaps higher, it will be key to spot if continuation holds or if this was only a retracement toward a longer-run correction.
S&P 500 technical levels of interest:
Resistance Levels
- 6,930 (current All Time-Highs)
- ATH Resistance 6,900 to 6,930
- Intermediate resistance 6,830 to 6,855
- Daily highs 6,796
Support Levels
- 6,707 session lows
- Pivot and MA 200 6,720 to 6,750 (testing)
- 6,680 to 6,700 support
- 6,570 to 6,600 Key support
- 6,490 to 6,512 Previous ATH now Support (4H MA 200 Confluence)
Safe Trades!
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About the Author
Market Analyst
Elior brings over seven years of experience in financial markets to our analyst team. Since 2018, he has actively engaged in observing, charting, and trading, driven by his passion for mastering market dynamics. With a profound understanding of the geopolitical and macroeconomic forces that shape market movements, Elior focuses on analysing the impact of breaking news, market sentiment, and critical economic data releases on trading flows.
As a versatile analyst, he contributes powerful insights to the team, effectively integrating geopolitical and technical analysis to provide clear and comprehensive market perspectives.
Prior to joining our team, Elior honed his expertise as a Fixed Income Trader and Market Analyst at the Montreal Exchange.
Elior brings over seven years of experience in financial markets to our analyst team. Since 2018, he has actively engaged in observing, charting, and trading, driven by his passion for mastering market dynamics. With a profound understanding of the geopolitical and macroeconomic forces that shape market movements, Elior focuses on analysing the impact of breaking news, market sentiment, and critical economic data releases on trading flows.
As a versatile analyst, he contributes powerful insights to the team, effectively integrating geopolitical and technical analysis to provide clear and comprehensive market perspectives.
Prior to joining our team, Elior honed his expertise as a Fixed Income Trader and Market Analyst at the Montreal Exchange.