Worried About a Stock Market Crash? Why You Should Mark Your Calendars for January 30.

If you’re working on Wall Street, there are always a few recurring dates you want to circle on your calendar. There are jobs numbers, Federal Reserve meetings, and loads of earnings reports. But one date that investors may not have on their radars is coming in hard and fast.

Jan. 30 is the U.S. government’s next big deadline to avoid another federal shutdown. In past years, investors may have felt that they could ignore these deadlines altogether. But after last year’s record 43-day shutdown, you might want to pay a bit more attention this time around.

Political gridlock can still move markets. But government shutdowns carry a lot more market risk than investors realize, which is why some analysts are already stressing about the prospect of a full-on stock market crash at the end of January.

So, is disaster looming? 

Let’s take a closer look at what’s going to happen in the run-up to Jan. 30 and why it could become a flashpoint for volatility.

Why Is Jan. 30 a Big Deal?

For better or for worse, the U.S. government relies on borrowing to keep federal services up and running. As a result, lawmakers in Congress need to pass a budget or a continuing resolution fairly regularly to maintain adequate funding for government operations. 

Sounds simple enough, right? Wrong. 

These resolutions and budget agreements often get entangled in partisan politics. But if no agreement can be made between the two parties by their funding deadline, the government will shut down.

It’s happened more than a dozen times since the 1970s, and shutdowns typically don’t last too long. But over the past decade, shutdowns have been getting longer and longer. President Donald Trump has presided over the last few shutdowns and set two successive records for the longest shutdown. 

Nobody needs reminding of the 43-day marathon we just wrapped up in November.

Not everyone is equally affected when the government shuts down, though. A lot of private sector workers are pretty much unaffected in terms of take-home pay. However, hundreds of thousands of federal workers are furloughed, while others are expected to continue working without pay. Additionally, some government programs and departments must close their doors entirely.

That all adds up pretty fast, which is why the Congressional Budget Office (CBO) estimated that 2025’s marathon shutdown ended up costing the U.S. economy around $11 billion.

Nobody wants it to happen again. That’s why Jan. 30 is a huge deal for a lot of American families. But it’s also important if you’re working over on Wall Street — because when big deadlines loom, markets don’t shrug. They’ve got to price in uncertainty.

How Did the Stock Market React to Last Year’s Shutdown?

Markets hate uncertainty. And unfortunately, government shutdowns remove a lot of certainty from the equation.

When the government shuts down, key economic reports on the country’s jobs data, GDP, and inflation get postponed or axed entirely. That creates problems for sectors such as financials, consumer discretionary, and small caps, which are sensitive to macroeconomic data. Investors are effectively flying blind, which can cause price swings.

Shutdowns also affect consumer confidence. Consumption softens across local economies and federal job centers if workers start to go home without pay. Discretionary spending drops, which can hurt companies heavily exposed to the retail sector.

Then you’ve got a risk premium on Treasuries. When the government shuts down, bond yields get pulled down along with it. Meanwhile, risk assets like equities often go up. That’s the sort of risk transfer we saw when the government shut down in 2019, and it’s something to look out for again in 2026.

But before you run out and start panic-buying, it’s important to look at how Wall Street reacted to last year’s record-breaking shutdown. It should give you some confidence.

Believe it or not, the S&P 500 Index ($SPX) actually hit new records and gained 2.4% over the course of the last shutdown. Gold extended its bull run and hit its highest price in history. FX markets were relatively steady, with the U.S. Dollar Index ($DXY) managing to reverse its losses as the shutdown dragged on, and Treasury yields rose as expected towards the end of October.

Long story short: Everything was fine.

That’s because investors tend to understand that government shutdowns are just a lot of political noise. The fundamentals go unchanged during these periods, and monetary policy and corporate earnings are the core focus.

In the case of 2025’s shutdown, the Fed had already been pivoting to a more dovish posture and rate cuts. That’s supportive for most stocks, and investors normally price in the fact that funding stalemates will be temporary. This insulates markets against irrational price swings.

So, should you keep your eye on Jan. 30? Absolutely. But you shouldn’t panic.

Shutdowns often cause short-term pullbacks, sure. But they rarely last, and savvy traders can even use that volatility to their advantage by looking for risk-off pricing ahead of time.

Just remember: Half the battle is discipline. Markets will zig-zag. Headlines will try to scare you. But any government shutdown we see at the end of January will probably follow the same script Wall Street has seen time and time again.

And who knows? Maybe lawmakers will even set aside their differences and agree on something before we even get to that stage.