Government Shutdown: How to Navigate the Market and Manage Your Portfolio

October 02, 2025

The federal government is currently in a partial shutdown¹the first since late 2018. At that time, the shutdown lasted 35 days, making it the longest on record, according to Vanguard.²

It’s tough to predict how markets will respond to short-term events like this. Rather than reacting to daily headlines, stay focused on your long-term goals. If you’re feeling uncertain, consider connecting with a financial professional to talk through your plan and explore any adjustments that might make sense.

Quick decisions made under stress can have lasting impacts. Here are a few tips to help you manage your finances during a shutdown:

Managing Your Portfolio During a Government Shutdown

Don’t try to time the market: It is very risky to try and predict how the market will react to a short-term political event. Investors should maintain a long-term focus and try not to focus on the fluctuations that may occur.
Remain diversified: It is critical to remain diversified with your investment strategy and not panic and make changes to your portfolio based on short-term political events.³
Be careful with government-dependent stocks: Stocks that rely on government-driven business could be volatile and risky.⁴
Keep a long-term focus: Stay focused on the long-term and don’t get caught up in the short-term trading behavior that comes with short-lived market volatility.
Have a cash cushion: Having liquid cash assets in a money market or high-yield savings account can help to relieve some of the stress brought on by market volatility that comes with a government shutdown.⁵

Key Points to Keep in Mind

Data might be delayed: Key government reports, such as the jobs report, might be delayed.⁶
A government shutdown is not a debt-ceiling crisis: It is critical to be aware that a government shutdown is not the same as a debt-ceiling crisis, which is worse, as it could lead to a debt default for the U.S.⁷

The Impact on Industries and Investments

Government contractors and airlines: Government contractors may face delays in modifications to contracts or payments. Airlines face increased delays and cancellations if staff refuse to work because they won’t get paid.⁸
Financial regulators: Some financial regulators, such as the Securities and Exchange Commission (SEC) may be forced to operate with a reduced staff, slowing down or halting most activities. Filings from investment companies on the EDGAR system will be delayed, though they will still accept registration statements, offering statements, and other filings.⁹
Stocks: There may be short-term volatility.¹⁰
Tourism and travel industry: Shortages at the TSA and air traffic control may cause issues and lead to longer lines and flight delays. National Museums and Parks may close, which could impact local tourism economies.¹¹
Federal loans: Small business loans and other federal loan approvals, including some mortgages, may get delayed.¹²

Guidance When You Need It Most

Consider scheduling a meeting with a financial professional to discuss any concerns you may have and explore adjustments you may not have considered. Making quick, reactive decisions now could have long-term consequences.

Click here to schedule a consultation. We’re here to help you navigate uncertainty and stay focused on the long term.

Important Disclosures:

Content in this material is for educational and general information only and not intended to provide specific advice or recommendations for any individual.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by LPL Marketing Solutions

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Sources:

1 Everything you need to know about the US government shutdown

²Why the US government has shut down and what happens now

³Staying the course during a government shutdown | Vanguard

⁴The U.S. Government Just Shut Down: Here's What It Means for the Economy and Stocks

⁵Government Shutdowns | Edward Jones

⁶Government shutdown 2025: Live updates, news and analysis

⁷What’s the difference between a government shutdown and a failure to raise the debt ceiling? | Brookings

⁸The U.S. federal government just shut down. Here's what it means for you and your money. | Morningstar