The Senate has passed a temporary funding bill, but can the US stock market really breathe a sigh of relief?

On Monday, the U.S. Senate passed a temporary funding bill with 60 votes, extending government funding until January 2026. This move caused the Nasdaq to pump nearly 1% in the short-term, and gold also rose to $4056. Sounds good, right? But this is just superficial.

The issue is stuck here - the Federal Reserve's policy is the real variable. Both Powell and Vice Chairman Jefferson's recent speeches have suggested that interest rate cuts are not coming soon, and the 3.75%-4% interest rate is already close to neutral levels. What’s even more painful is that the government shutdown has resulted in the Labor Department delaying the release of the employment report for the second consecutive month, and the CPI data may also be absent. The December Federal Reserve meeting will have to make decisions on interest rate cuts without complete data, which makes it extremely difficult.

Goldman Sachs analysts point out that while technology valuations are a bit high, they have not yet reached historical bubble levels, as the profit growth of major tech companies is indeed present. Therefore, the U.S. stock market is likely to experience high-level fluctuations - it won't crash significantly, but volatility will continue to amplify. If the Nasdaq falls below 24000, caution is warranted; conversely, if it holds above 25700, there is an opportunity to challenge new highs.

Key Point: Don't be misled by the short-term benefits of the government shutdown resolution; the Federal Reserve will be the dominant player in the next 3-4 weeks.