Markets Steady as Shutdown Ends, Volatility Rises, and Global Equities Continue to Perform

Matthew Rubin Chief Investment Officer

 

1. The resolution of the U.S. government shutdown brought limited market reaction as investors had largely adjusted to the disruption.
2. The volatility index climbed as investors reassessed market risks tied to shifting economic signals and sector-specific concerns.
3. International stocks advanced again last week, keeping global markets on track for their potentially strongest annual gains since 2009.

 

1. Government Shutdown Ends After Six-Week Stalemate

Last week, the government shutdown ended after 43 days, making it the longest on record. A budget agreement approved by Congress and signed by the president funded operations through January and ensured furloughed federal employees would receive back pay.¹ With agencies reopening, most of the delayed income and activity should begin to recover in the weeks ahead.

Financial markets showed little response to the news. Throughout the shutdown, equities and bonds held relatively steady, with the S&P 500 edging higher and Treasury yields moving within a narrow band.¹ Investors had already treated the disruption as temporary, and the announcement did not shift that view.

One lingering challenge is the backlog of federal data. The release schedule will not return to normal immediately. The White House signaled that October’s unemployment rate will not be published, though September’s figures, already collected before the shutdown, are expected this week.¹ This gap leaves investors waiting for clear signals on the state of the labor market.

2. A Look at Last Week’s Turn in Market Volatility

Last week, the CBOE Volatility Index (VIX), which tracks monthly expectations of market turbulence, drew renewed attention as it rose from the calm range it had occupied for much of the year.² Created in the aftermath of the 1987 stock market crash, the index is built from prices of numerous S&P 500 options, which tend to climb when traders seek protection during uncertain times. As a result, the VIX often moves in the opposite direction of the broader equity market and serves as a gauge of shifting sentiment.

Despite rising from a level of 17 to 22 last week — a noticeable, if modest, shift in tone — the VIX remains well below its long-term extremes.² In April, for example, the index topped 50 following Trump’s tariff announcements. Derivatives and exchange-traded products linked to the index continued to draw active positioning, with some investors leaning on futures to express views on whether the recent calm would hold. Meanwhile, shifting expectations for upcoming economic data and the Federal Reserve’s next policy step added to the mix, leaving traders focused on how long the uptick in volatility might persist.

3. International Equities Extend Strong Year Amid Economic Growth

International equities continued their strong run last week, leaving the MSCI All Country World ex USA Index on pace for an over 30% increase for the year.³ If these levels hold through December, it would mark the best annual performance in more than a decade. A large share of this momentum has come from Europe, where steady economic improvement followed a series of rate cuts by the European Central Bank and new fiscal measures in Germany earlier this year.²

Emerging markets have been another major driver of performance. Technology-focused regions delivered some of the sharpest gains, with Chinese equities rising roughly 40% and South Korean markets advancing close to 90% for the year.³ The weaker U.S. dollar further boosted international returns. Excluding currency effects, year-to-date returns remain close to 24%.³

Investors are now weighing whether this strength can carry into next year. Improving global growth, more attractive valuations, and calmer trade conditions suggest that opportunities remain, particularly in emerging-market equities and international small- and mid-cap stocks.

For the period ending 11/14/25.
* Small-cap stocks are represented by the Russell 2000^® Index. International stocks are represented by the MSCI EAFE. Bonds are represented by the Bloomberg US Aggregate Bond Index. Oil is represented by WTI Oil (West Texas Intermediate Oil), a benchmark for light, sweet crude oil and a primary measure for pricing oil contracts and futures in the U.S.

Sources
¹ Bloomberg
² The Wall Street Journal
³ FactSet

Disclosures

Cary Street Partners is the trade name used by Cary Street Partners LLC, Member FINRA/SIPC; Cary Street Partners Investment Advisory LLC and Cary Street Partners Asset Management LLC, registered investment advisers. Registration does not imply a certain level of skill or training.
Any opinions expressed here are those of the authors, and such statements or opinions do not necessarily represent the opinions of Cary Street Partners. These are statements of judgment as of a certain date and are subject to future change without notice. Future predictions are subject to certain risks and uncertainties, which could cause actual results to differ from those currently anticipated or projected.
These materials are furnished for informational and illustrative purposes only, to provide investors with an update on financial market conditions. The description of certain aspects of the market herein is a condensed summary only. Materials have been compiled from sources believed to be reliable; however, Cary Street Partners does not guarantee the accuracy or completeness of the information presented. Such information is not intended to be complete or to constitute all the information necessary to evaluate adequately the consequences of investing in any securities, financial instruments, or strategies described herein.
Cary Street Partners and its affiliates are broker-dealers and registered investment advisers and do not provide tax or legal advice; no one should act upon any tax or legal information contained herein without consulting a tax professional or an attorney.
We undertake no duty or obligation to publicly update or revise the information contained in these materials. In addition, information related to past performance, while helpful as an evaluative tool, is not necessarily indicative of future results, the achievement of which cannot be assured. You should not view the past performance of securities, or information about the market, as indicative of future results.
A Composite PMI is a single index that tracks economic activity by combining the performance of both the manufacturing and services sectors, providing a comprehensive overview of overall business conditions.
Nothing contained herein should be considered a solicitation to purchase or sell any specific securities or investment-related services. It should not be assumed that any of the securities transactions or holdings discussed were, or will prove to be, profitable.
The Consumer Price Index (CPI) measures the monthly change in prices paid by U.S. consumers. The Bureau of Labor Statistics (BLS) calculates the CPI as a weighted average of prices for a basket of goods and services representative of aggregate U.S. consumer spending. The CPI is a measure of inflation and deflation. The CPI report uses a different survey methodology, price samples, and index weights than the producer price index (PPI).
Additional Disclosures: International and Foreign Securities, Fixed Income Investments, the Consumer Price Index, the Producer Price Index.
Comparative Index Descriptions: The Standard & Poor’s (S&P) 500 Index, The Russell 200^® Index, The NASDAQ Composite Index, The MSCI EAFE Index, Dow Jones Industrial Average^® (Dow Jones or DJIA), The Bloomberg Barclays US Aggregate Bond Index (US Agg Bond), The CBOE Volatility Index (VIX). CSP2025061_35