Treasury Yields Stabilize as US Government Shutdown Deal Progresses, Fueling Market Optimism in November 2025

• How Are Treasury Yields Responding to the Shutdown Resolution?
• What's Driving the Market's Positive Reaction?
• Which Market Sectors Are Benefiting Most?
• How Does This Impact Mortgage Markets?
• What Are Analysts Watching Next?
• Could This Mark a Turning Point for Risk Assets?
• What Historical Precedents Should We Consider?
• How Are Global Markets Interpreting the News?
• What Risks Remain on the Horizon?
• Investor Takeaways
• Frequently Asked Questions

In a surprising twist of financial fate, US Treasury yields have found their footing this week amid growing Optimism that the longest federal shutdown in American history may finally end. The 10-year note holds steady at 4.11%, while tech stocks and global markets rally on the news. Here's why Wall Street is breathing easier - and what it means for your portfolio.

How Are Treasury Yields Responding to the Shutdown Resolution?

The bond market is showing remarkable stability as political winds shift in Washington. As of November 10, 2025, the 10-year Treasury yield maintained its position at 4.111%, barely budging from last week's levels. The 2-year note saw a modest 3 basis point increase to 3.58%, while the long bond (30-year) inched up just 1 basis point to 4.71%. These minuscule movements suggest traders are pricing in a high probability (87% according to Polymarket bets) that President TRUMP will sign the funding bill before week's end.

What's Driving the Market's Positive Reaction?

Three key factors are at play here. First, the imminent release of $200 billion from the Treasury's general account promises to flood the system with much-needed liquidity. Second, the resumption of economic data reporting (once government employees return) will remove what BNY's Bob Savage calls "the fog of uncertainty" surrounding inflation and employment trends. Third, and perhaps most importantly, the resolution removes the specter of Q4 economic contraction that WHITE House advisor Kevin Hassett had warned about.

Which Market Sectors Are Benefiting Most?

Tech and AI-related stocks are leading the charge in pre-market trading. Nvidia surged 3.6%, Alphabet climbed 2.5%, and Meta gained 1.07% as investors rotated back into growth names. The Nasdaq 100 futures jumped an impressive 1.52%, outpacing the Dow's 0.43% gain. Across the pond, European markets joined the party with the Stoxx 600 up 1.5%, while Asia saw even bigger moves - Japan's Nikkei rose 1.3% and South Korea's Kospi skyrocketed over 3%.

How Does This Impact Mortgage Markets?

Interesting side note - ICE Markets data shows October mortgage applications for highly qualified refinancers hit a 3.5-year high as rates dipped. This suggests the housing market might be more resilient than some bears predicted. With Treasury yields stabilizing, we could see this trend continue into November, especially if the Fed signals any liquidity support measures.

What Are Analysts Watching Next?

The BTCC research team highlights two critical developments: First, whether the yield curve (currently at 53 basis points between 2s and 10s) continues its recent steepening trend. Second, if foreign demand for US assets rebounds now that the shutdown uncertainty is clearing. As Savage noted, "The bond market is signaling returning confidence, but it's a fragile signal that needs confirmation."

Could This Mark a Turning Point for Risk Assets?

Market strategist Nigel Green certainly thinks so. He observes that if government operations resume this week, "Treasury yields will stabilize and capital will return to risk assets through December." This aligns with the stellar Q3 earnings season - 87% of reporting S&P 500 companies beat expectations with 16.8% year-over-year profit growth. Not too shabby for an economy supposedly in shutdown mode.

What Historical Precedents Should We Consider?

Past government shutdowns (2013, 2018-19) show markets typically rebound sharply once resolution occurs. However, the 40-day duration of this shutdown creates unique challenges. The BTCC team cautions that some economic damage may already be baked in, particularly for government contractors and federal workers who missed paychecks. The key question is whether consumer spending can bounce back quickly enough to salvage Q4 GDP.

How Are Global Markets Interpreting the News?

From Frankfurt to Hong Kong, traders are breathing sighs of relief. The DAX gained 1.3%, France's CAC 40 ROSE 1.53%, and Hong Kong's Hang Seng advanced over 1.5%. This synchronized rally suggests international investors view the shutdown resolution as removing a major overhang on global growth prospects. After all, when America sneezes...

What Risks Remain on the Horizon?

While the mood is decidedly upbeat, several caveats deserve mention. First, the funding bill only extends through January 30, 2026 - meaning we could be back in shutdown territory in just 11 weeks. Second, the Treasury still faces daunting borrowing needs that could pressure yields higher once issuance resumes. Third, as the BTCC team notes, "Foreign demand for US assets isn't guaranteed to return just because the government reopens."

Investor Takeaways

For bond investors, the current stability presents an opportunity to reassess duration risk. Equity traders should watch for continuation of the AI/tech leadership that's reemerged. And everyone should monitor Treasury's cash management - that $200 billion liquidity injection could create interesting Ripple effects across asset classes. As always in markets, the key is separating temporary political noise from lasting fundamental changes.

Frequently Asked Questions

What are current Treasury yields after the shutdown deal progress?

As of November 10, 2025: 10-year at 4.111%, 2-year at 3.58%, and 30-year at 4.71% - showing remarkable stability from last week's levels.

How likely is the government to reopen this week?

Polymarket traders assign an 87% probability, while analysts like Nigel Green believe reopening could stabilize yields and boost risk assets through December.

Which market sectors are benefiting most from the shutdown resolution?

Tech and AI stocks lead the charge, with Nvidia up 3.6%, Alphabet gaining 2.5%, and Nasdaq 100 futures jumping 1.52% in pre-market trading.

What happens to the $200 billion in Treasury's general account?

These funds will be released into markets, improving liquidity and potentially easing recent concerns about reduced demand for US assets.

How are global markets reacting to the US shutdown news?

Major indices worldwide rallied, with Europe's Stoxx 600 up 1.5%, Japan's Nikkei gaining 1.3%, and South Korea's Kospi surging over 3%.