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Markets appear to have shrugged off the latest US government shutdown, despite its headline-grabbing nature, where the equity reaction has been surprisingly muted, unlike when Congress is at a standoff over raising the debt ceiling.

- Sanjesh Pinnapola

The distinction matters: a shutdown arises when Congress fails to pass funding for government operations, whereas a debt-ceiling standoff threatens the ability to meet existing obligations and poses a far greater systemic risk.

A government shutdown means nearly 1.5 million federal employees go without pay.

Historically, shutdowns have had limited market fallout. During the 16-day 2013 shutdown, the S&P 500 gained roughly 3.1%. While the longest in history, a 35-day shutdown from December 2018 to January 2019, coincided with a 10.3% rise.