As you’ve likely seen, the federal government shut down as of October 1, 2025. These episodes are frustrating and disruptive, but they’re not new, and history gives us a helpful perspective.
Below are the key points we want you to know.
1) Social Security Benefits: Near-term and Longer-term
- Payments will continue. Social Security is mandatory spending, not part of the annual appropriations that shut down. The Social Security Administration follows a contingency plan that keeps benefits flowing even when parts of the government close. Some in-office services can slow or pause, but checks direct-deposited to you continue.1
- Longer-term solvency is a separate issue. A shutdown doesn’t change the underlying Social Security trust fund math; that’s a legislative/actuarial problem, not a shutdown problem. Expect normal benefits now; any long-run changes (if Congress eventually enacts them) would come through separate legislation, not via a shutdown.2
2) What Past Shutdowns Did to the Stock Market
- Historically, stock moves during shutdowns are modest—and often positive. Looking across shutdowns since the 1970s, the S&P 500 has been roughly flat on average during the shutdown window, with a slight tendency to rise rather than fall. In the 2013 16-day shutdown, the S&P 500 dipped about 2–3 percent at one point but finished the period up; during the 2018–2019 (35-day) shutdown, the S&P actually rose ~10 percent over the span. Past results don’t guarantee future outcomes. 3
- Recoveries tend to be quick. Across shutdowns, the index has been higher a majority of the time 1–12 months later, with one study showing the S&P 500 was higher ~86 percent of the time a year later, averaging ~12–13 percent. Remember, past results don’t guarantee future outcomes.4
3) After the Recovery, Then What?
- In cases where stocks fell during a shutdown and then recovered, markets often kept climbing alongside the broader economic and earnings backdrop. The 2013 and 2018–2019 episodes are good examples: after short-term volatility, indices moved to higher levels over the following months as investors refocused on fundamentals, interest-rate policy, and earnings. The same dynamic—policy noise vs. business results—tends to dominate once the headlines fade.
How We’re Positioned:
Our job is to separate the signal from noise. Shutdowns can delay data releases and create short-term volatility, but they have not historically been a reason to rethink a long-term strategy. If this stretches on and new facts change the outlook, we might need to review our outlook.
If you have questions, we’re here for you.
Disclosures:
Stocks are measured by the Standard & Poor's 500 (S&P 500) Composite Index, which is an unmanaged index considered to be representative of the overall U.S. stock market. Index performance is not indicative of the past performance of a particular investment. Individuals cannot invest directly in an index.
- SSA.gov, 2025
- CRFB.org, March 14, 2025
- Kiplinger.com, 2025
- Bloomberg.com, September 30, 2025