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The government shutdown is unlikely to derail the stock market’s momentum into year-end, according to Tom Lee, Fundstrat Global Advisors’ head of research. Lee believes the suspension of economic data releases from federal agencies is a “sidebar issue,” adding that past shutdowns have had little lasting impact on equities. The widely followed strategist, who called 2025’s bull run to all-time highs in stocks, expects the S & P 500 to reach at least 7,000 by December with potential for further gains. “We would not lean bearish because of shutdowns,” Lee wrote in a note to clients Thursday. “If stocks are down, we would be dip buyers. This is something to be mindful of, as we may hear of dire warnings of calamity because of the shutdown.” The S & P 500 has surged almost 40% since its April lows, returning to record highs and bringing 2025 gains to 14%. The equity benchmark would have to climb about 4% to reach 7,000 from Wednesday’s close of 6,711.20. .SPX YTD mountain S & P 500 Many on Wall Street believe the length of a government closure matters because a longer-than-normal stoppage could weigh on an already fragile economy and put pressure on a stock market near record highs. Still, Lee pointed to seasonal strength as the main driver for equities from here. He noted that since 1950 the S & P 500 has posted a median fourth-quarter gain of 4.9% with an 81% win ratio. Lee also highlighted parallels to 1998 and 2024, when the Federal Reserve cut interest rates in September and the index rose an average of 13.8% in the final three months of the year. A repeat of that pattern would imply a move toward 7,750. “There is a strong seasonal tailwind underway and the upside is higher given the Fed is dovish,” he said. Lee advised against moving defensive in response to the shutdown, though he said gold and bitcoin remain attractive holdings.
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