The stock market is in danger of overreacting, meaning a dip next week could be warranted, UBS Managing Director and Head of Foreign Exchange Distribution, North America, Paul Richards said Tuesday.

"I think the market underestimated this situation back in September. We were so focused on the Fed, we forgot about Washington," he said. "We're in danger, in my opinion, of overreacting."

On CNBC's "Fast Money," Richards said that the federal shutdown, caused by Congress's failure to pass a funding bill, could continue through the weekend.

"Come Monday, you could have a brilliant buying opportunity for this market," adding that the S&P 500 would be a "buy" at 1,650.

(Read more: Demand for dollar spikes outside US as debt deadline looms)

Richards said that he believed politicians in Congress would eventually pass a federal budget and authorize the payment of debt obligations.

"They're going to ultimately react to the polls," he said." I think that they have an obligation to look after their constituents, and ultimately they'll do the right thing."

(Read more: 'Buying until my hands bleed': Simon Baker)

Richards said that Congress would likely push an agreement right to the debt-ceiling deadline.

"They have to get something done, and I don't think we're going to see anything until the last hour. We could even just tip over the debt ceiling," he said. "But only, in my opinion, by a day. I just feel that within a week, we could be looking at the situation and saying, 'This looks a lot better,' and we will regret the opportunity for not putting the toe in the water here."

— By CNBC's Bruno J. Navarro. Follow him on Twitter @Bruno_J_Navarro.