Why does the US government shutdown always cause the market to "drop first and ask questions later"?

Many people ask: The government shutdown isn't the first time, so why does the market always get scared and jump?

The answer is quite straightforward:
Because a shutdown means the decision-making mechanism is temporarily malfunctioning.
What the capital markets fear most isn't bad news, but not knowing who is making decisions and when. When budget negotiations stall and policy tools become temporarily ineffective, the market instinctively discounts risk more heavily.
This is also why, when shutdown expectations rise, common phenomena include:
* Increased volatility in US stocks
* Synchronous pullback of risk assets
* Phase-wise strengthening of defensive assets

But it’s important to note that these reactions are often short-term and emotional. Once signals of compromise appear, the market usually recovers quickly.
Therefore, I prefer to see the shutdown crisis as a "rhythm event" rather than a "trend event."
It influences when to enter or exit, rather than whether to be long or short in the long term.

In such an environment, the ones most likely to suffer losses are not the conservative investors, but those trying to "buy the bottom" based on news. #美政府停摆危机