Here's what shutdowns have done to the stock market throughout history

October has kicked off with a government shutdown.

For markets, the drama around a shutdown isn’t usually all that impactful, but there are reasons to believe this time could be a bit different, especially if the delay of key data like the jobs report and consumer inflation clouds the outlook for more rate cuts.

Still, history provides a rough guide to what to expect as the government shuts down while lawmakers spar over funding.

The US government has shut down 20 times since 1976, typically for short periods, with the average length being about eight days. However, the longest shutdown took place in 2018 during Donald Trump’s first term. That shutdown was among the longest and was also an outlier in terms of the market moves during that time.

On Wednesday. Jeff Buchbinder, chief equity strategist at LPL Financial, showed that since 1976, S&P 500 returns have skewed slightly upward during government shutdowns.

“Considering that most of the losses came during the late 1970s, and the biggest decline during a shutdown since 1980 was 2.2%, history suggests stocks have a good chance of going higher during this shutdown, though past performance does not guarantee future results,” he said.

On average, the S&P 500 is nearly flat during past shutdowns, with a few outliers.

Buchbinder cited the 2013 government shutdown, which lasted from October 1 to 17 and was caused by disagreements over funding the Affordable Care Act, but had no severe impact on the stock market.

“The S&P 500 had some down days, but overall, the equity market took all the political drama in stride with a 3.1% advance during those 16 days, he said.

The big move up came during the December 2018 shutdown, which stretched into the early weeks of 2019. In that 35-day stretch, the S&P 500 rose 10%.

In bonds, the reaction to a shutdown is usually also fairly staid.

“Historically, a government shutdown hasn’t generally been very eventful for the bond market. If anything, it could provide a little short-term relief since Treasuries usually rally when uncertainty rises,” Buchbinder said. He added that during the last three government shutdowns, the 10-year Treasury yield was lower by about five basis points on average.

Jeff Le, managing principal at 100 Mile Strategies, noted the difficulty in assessing the likely outcome of the shutdown.

“The government shutdowns of the past have varied in length and scope,” he told Business Insider. “And the uncertainty of this shutdown in length, with little off-ramps, creates challenges to predict what’s next.”

This time around, there’s lingering unease around highly important economic data that will inform the path of monetary policy for the rest of the year and into 2026.

It is notable that this shutdown comes in the midst of a rate-cutting cycle that investors have been clamoring for all year. Any disruption to predictions for more cuts could be bearish for markets.

Economist Mark Zandi told Business Insider this week that he sees a greater impact from this shutdown if it drags on and hinders the Fed’s decision-making abilities.