A prolonged US shutdown may finally rattle markets, says JP Morgan

The shutdown of the US government may start to affect the market if it lasts more than nine days, said an analyst of JP Morgan Private Bank.

While the closure of US government departments has limited impact on the market so far, “a prolonged shutdown may move the markets,” Chen Weiheng, global investment strategist at JP Morgan Private Bank, wrote in a note.

Given the average length of the past 10 shutdowns is about nine days, “anything more than that may potentially be alarming for markets,” Chen added in a reply.

Based on the past data, JP Morgan also estimated that the US quarterly economic growth would typically fall by about 0.1–0.2 percentage points for every week the government is shut down.

But because much of the impact on the economy is typically reversed in the quarter following the shutdown, we would expect most of the impact to be reversed in the first quarter of 2026, Chen wrote.

In addition, Chen thinks investors for now pay more attention to the US Federal Reserve’s interest rate cut path, trade and immigration policy, economic data and corporate earnings.