Global Stocks Rally as US Government Shutdown Fears Ease: Market Insights and Economic Updates

By: Swarnalata

Published on: Mar 15, 2025

Global stocks surged on Friday as fears of a US government shutdown eased, lifting investor sentiment despite mixed economic data. Wall Street followed the lead of the FTSE 100 and European markets, with major indices posting significant gains. Here’s a deep dive into what’s driving the markets and the latest developments in the global economy.

Key Market Movements

FTSE 100 (^FTSE): Up 1.1%

S&P 500 (^GSPC): Rose 1.7%

Nasdaq Composite (^IXIC): Jumped 2%

Dow Jones Industrial Average (^DJI): Gained 1.4%

DAX (^GDAXI): Climbed 1.7%

CAC 40 (^FCHI): Increased 1.1%

The rally came as Senate leader Chuck Schumer expressed confidence in passing a funding bill to avoid a US government shutdown. This news offset concerns from a weak University of Michigan consumer sentiment survey, which plunged to 57.9, its lowest level since November 2022.

Inflation and Economic Concerns

The survey highlighted rising long-term inflation expectations, which hit 3.9%—the highest since 1993. This comes amid stubborn inflation and new tariffs impacting American consumers.

Meanwhile, the UK economy unexpectedly shrank by 0.1% in January, driven by a 0.9% slump in the production sector. Economists had anticipated 0.1% growth, making this a concerning development ahead of the chancellor’s spring statement, which is expected to include government spending cuts.

Global Economic Outlook

Despite Friday’s gains, global stocks are on track for their worst week since September. The pound fell 0.3% against the US dollar to 1.2914, reflecting ongoing economic uncertainties.

In Europe, Germany’s incoming chancellor Friedrich Merz secured Green Party support for increased state borrowing and debt rule reforms, boosting the DAX. Gold prices, meanwhile, surged past $3, 000 an o u n ce b e f orese ttl in g a t$ 2,986, nearly doubling in value over the past five years.

What’s Next for Investors?

As markets digest these developments, investors are cautiously optimistic. The easing of US government shutdown fears has provided temporary relief, but concerns about inflation, economic growth, and geopolitical risks remain.

Stay tuned for more updates on global markets and economic trends shaping 2025.