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Congress could kill stock rally if government shutdown drags on

Andrew Harrer | Bloomberg | Getty Images

A shallow stock market sell-off is expected if Congress shuts down the government, but the real turbulence would begin if the closure does not end quickly or if there is a major clash over the debt ceiling.

Stocks sank Monday as Congress squared off over whether Obamacare would be tied to a bill to extend government funding past midnight Sept. 30. The Senate passed a clean bill to specifically fund the government through Nov. 15, but House Republicans had their own version Monday, which included delaying aspects of Obamacare, or the Affordable Care Act.

The dollar fell against major currencies and Treasury prices rose slightly, as traders watched the maneuvering by Congress. Many analysts expect a short shutdown if it occurs, and then Congress will move on to do battle on the debt ceiling. Concerns a shutdown would weaken economic growth hit both gold and oil markets Monday. Gold lost 0.9 percent to $1,327 per troy ounce, and West Texas Intermediate crude slumped $0.54 to $102.33 per barrel.