House Passes Funding Deal With Only Trump's Signature Needed to end Government Shutdown

Political

Economic

Summary:

The movement on the bill came after President Trump himself stepped in to get his party in line.

A four-day partial US government shutdown is set to end within hours after the House of Representatives approved a funding measure and sent it to President Trump's desk for his signature.

The vote in the House came down to the wire and ended with a tally of 217-214. After a day of arm-twisting, Republicans unified on a key procedural step earlier in the day, which set up the narrow bipartisan vote Tuesday afternoon for final approval.

The final vote saw 196 Republicans join 21 Democrats to push the measure over the line and send it to White House, where press secretary Karoline Leavitt reaffirmed Tuesday afternoon that the president would sign it.

Tuesday's vote follows the Senate's 71-29 passage of the measure last week and a White House pressure campaign that pushed House Republican holdouts over the line.

The bill contains five spending measures while delaying a final decision on funding the Department of Homeland Security until next week.

Trump's signature would mean that key government functions will reopen soon — but only after a delay in the January jobs report was announced on Monday. The Job Openings and Labor Turnover Survey (JOLTS) for December 2025 was also scheduled to be released on Tuesday, but was likewise delayed.

All told, funding for departments including the Pentagon, State, Transportation, and others will be authorized until Sept. 30 once the deal is enacted. Other areas in focus for markets — from the Federal Aviation Administration to the Internal Revenue Service — would be able to fully come back online, with minimal disruptions expected.

The politically charged funding for the Department of Homeland Security will be on a separate track, with funding extended only until Feb. 13. A fierce debate is expected over new restrictions for US Immigration and Customs Enforcement (ICE) in particular.

The movement on the bill came after President Trump himself stepped in to get his party in line.

"There can be NO changes at this time," Trump posted on Truth Social Monday before meetings and calls that led Republican opposition to largely crumble.

Two key GOP holdouts were Anna Paulina Luna of Florida and Tim Burchett of Tennessee, who had been looking to attach a separate election bill to the package.

They backed down, they said, after a White House meeting Monday evening that gave them assurance that their bill could be addressed separately.

"Rep. Luna and myself are now willing to allow that to happen," Burchett told reporters of the key vote to approve a rule for debate and a final vote on the bill.

Tuesday's back-and-forth will be far from the end of the wrangling on Capitol Hill over Homeland Security. Democrats are demanding a series of changes in how immigration operations in Minneapolis and elsewhere are carried out in exchange for funding.

Some progress could be forthcoming after Homeland Security Secretary Kristi Noem announced late Monday that "every officer" in Minneapolis will soon wear a body camera.

Source: Yahoo Finance

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Manuel

Commodity

Copper rebounded as a metals selloff led by silver and gold eased and a state-backed industry group called for China to boost its strategic reserves of the crucial industrial metal.

China should expand the size of the reserves and also work with major state-owned producers to boost commercial stockpiles, according to the China Nonferrous Metals Industry Association, which held an annual briefing to review trends in the sector on Tuesday.

Prices rose as much as 4.9% to $13,526 a ton on the London Metal Exchange, following an 11% plunge from a record high last Thursday to Monday’s close. Other base metals also climbed on the LME, while gold and silver rallied sharply. Copper Rebounds as China Industry Group Calls for Stockpiling_1

Copper Rebounds as China Industry Group Calls for Stockpiling_1

Prices had already been rallying ahead of the remarks on stockpiling amid signs of dip-buying from investors in China, the biggest consumer of the metal. Fabricators and manufacturers in the country also returned after weeks away from the heated market, replenishing stocks ahead of this month’s Lunar New Year holiday.

“Fabricators are willing to step in and buy when there is a correction of more than 10%,” said Li Xuezhi, head of research at Chaos Ternary Futures Co. Funds will also come in to buy the dip for copper with strong fundamental support, he added.

Investors have been piling into metals amid doubts about the US dollar and a shift away from currencies and sovereign bonds, driving frenzied price rallies across the commodities complex in January. Copper’s rally comes after it jumped more than 40% in 2025.

However, drivers for additional price increases in the near term have weakened, Li said, citing uncertainty over the direction of US monetary policy and easing risks of a supply squeeze on the LME.

Spot prices traded at a discount to the three-month benchmark contract on the LME in a contango structure that signals ample near-term supplies. Meanwhile, large premiums on Comex contracts over those on the LME have disappeared, discouraging metal flows to the US ahead of potential import tariffs which had drained supplies elsewhere.

Copper was up to settle at $ a ton on the LME. Tin climbed and aluminum was up .

Source: Bloomberg

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Henry Thompson

Remarks of Officials

Daily News

Economic

Stocks

Nvidia CEO Jensen Huang discusses the future of technology and AI at the World Economic Forum in Davos.

Nvidia CEO Jensen Huang has reaffirmed the company's plan to invest in OpenAI, directly pushing back on recent reports suggesting the landmark deal was in jeopardy.

"There's no drama involved. Everything's on track," Huang stated in a Tuesday interview with CNBC's Jim Cramer. His comments came as Nvidia's stock fell over 3.4% amid a wider tech sell-off, with shares now trading 13% below their October peak.

The $100 Billion AI Deal Under Scrutiny

The partnership first made headlines in September when Huang and OpenAI CEO Sam Altman announced a letter of intent. The plan outlined a staggering investment of up to $100 billion from Nvidia into the AI research lab, which would use the funds to build out AI infrastructure powered by Nvidia technology and requiring up to 10 gigawatts of power.

However, doubts began to surface. An SEC filing in November revealed the deal had not been finalized. The speculation intensified over the past weekend after a Wall Street Journal report claimed the agreement was "on ice."

Huang's Commitment to Future Funding

In his latest remarks, Huang sought to end the uncertainty by confirming Nvidia's participation in OpenAI's next fundraising round, which he described as potentially the "largest private round ever raised in history."

Last month, reports indicated that OpenAI was in discussions for a new funding round that could raise as much as $100 billion.

"We will invest in the next round," Huang said unequivocally. "There is no question about that." He also noted that Nvidia would be open to investing in subsequent rounds and would want to participate if OpenAI pursues an eventual IPO.

Navigating a Shifting Chip Landscape

The relationship between the two tech giants is foundational, as OpenAI has historically relied on Nvidia's graphics processing units (GPUs) to train and run its powerful AI models like ChatGPT.

Yet, recent commentary from Sam Altman has highlighted a critical bottleneck: a shortage of AI chips. Altman has stated that OpenAI could generate significantly more revenue if it had greater access to computing power. In response, OpenAI has started to diversify its supply chain, striking deals with Nvidia's competitors, including Advanced Micro Devices, Broadcom, and Cerebras.

Despite these moves, Altman publicly dismissed any notion of a rift. In a post on X on Monday, he clarified his company's position.

"We love working with NVIDIA and they make the best AI chips in the world," Altman wrote. "We hope to be a gigantic customer for a very long time. I don't get where all this insanity is coming from."

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Manuel

Stocks

US stocks slid Tuesday investors digested a wave of tech-focused earnings, precious metals jumped to continue their wild ride, and a partial government shutdown rolled into its fourth day.

The tech-heavy Nasdaq Composite (^IXIC) sank by 1.6% after initially beginning the session in the green, while the S&P 500 (^GSPC) lost nearly 1%. The Dow Jones Industrial Average (^DJI) fell around 0.4% after the blue-chip benchmark led gains on Monday with a 500-point advance.

Tech stocks got a boost after Palantir's (PLTR) surprisingly strong quarterly results signaled the AI trade has room to run, though the index's momentum has now flipped. Revenue at the data analytics firm surged, driven by demand for its AI platform, and its sales outlook topped estimates. Nasdaq, S&P 500 Slide as Investors Digest Flood of Tech Earnings, Government Shutdown_1

Nasdaq, S&P 500 Slide as Investors Digest Flood of Tech Earnings, Government Shutdown_1

That rosy outlook flipped early in the session, however, with many of tech's biggest names continuing a recent slide. Nvidia (NVDA) fell over 3% amid signs of cooling relations with OpenAI (OPAI.PVT). The startup's dissatisfaction with Nvidia's latest AI chips has bogged down talks with the chipmaker for an investment of up to $100 billion — a plan its CEO Jensen Huang downplayed on Monday. Amazon (AMZN) and Microsoft (MSFT) also lost ground amid a continued sell-off in software stocks.

That has turned a spotlight on chipmaker AMD's (AMD) after-hours earnings report, which could provide the best look yet at the AI trade amid those fears of Big Tech overspending and an AI bubble. Its results prepare the ground for quarterly updates from Amazon and Alphabet (GOOG), highlights later this week.

Also on Tuesday Tuesday, PayPal (PYPL) earnings and forecast missed estimates, as the payments services firm named HP (HPQ) boss Enrique Lores as its new CEO. Its stock tumbled over 16%, against a background of an exodus from software stocks. Reports from Pepsi (PEP), Pfizer (PFE), and Chipotle (CMG) are also on the docket.

Elsewhere in the corporate world, The Walt Disney Company (DIS) named parks chief Josh D'Amaro as the entertainment giant's next CEO, set to replace longtime leader Bob Iger on March 18. Shares in Disney fell.

Meanwhile, volatility continued to grip precious metals, as gold (GC=F) jumped over 6% to eye its biggest daily gain since 2008, having notched its deepest daily drop in 43 years on Friday. An influx of dip-buyers was credited as silver (SI=F) also rebounded dramatically from Monday's losses, surging over 13%.

Source: Reuters

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Christopher Hayes

Traders' Opinions

Remarks of Officials

Economic

Central Bank

Bond

Investors are positioning for a major shift in the bond market, betting on higher long-term Treasury yields and a steeper yield curve. The catalyst is the expected appointment of Kevin Warsh as the next Chair of the Federal Reserve, who is anticipated to pursue rate cuts while simultaneously shrinking the central bank's massive balance sheet.

This unique policy combination is forcing a market repricing, as the two actions pull financial conditions in opposite directions.

The Warsh Doctrine: Rate Cuts Meet Balance Sheet Cuts

Warsh’s expected strategy hinges on two key pillars. First is his preference for a significantly smaller Fed balance sheet, which currently stands at roughly $6.59 trillion. Reducing it means the Fed would buy fewer Treasuries, effectively withdrawing a major source of demand from the market.

When the Fed steps back, more government debt supply must be absorbed by private investors. This typically pushes long-term yields higher to attract buyers, leading to a steeper yield curve.

"The main outcome of shrinking the balance sheet would be to have a yield curve that is more normally positively sloped as it was historically before all the intervention following the financial crisis," said Eric Kuby, chief investment officer at North Star Investment Management Corp.

At the same time, Warsh is expected to keep short-term rates low. Despite a reputation as a hawk during his time as a Fed governor from 2006 to 2011, he has recently adopted a more dovish stance, aligning with President Donald Trump's calls for rate cuts. This mix of low short-term rates and high long-term rates is the classic recipe for a steepening yield curve.

Reading the Market: Treasury Yields and Inflation Fears

The bond market was already moving in this direction even before Warsh's nomination. A steepening yield curve—where the gap between long- and short-term rates widens—was being driven by concerns over inflation and rising fiscal deficits, which signal more government debt issuance ahead.

The spread between 2-year and 10-year Treasury yields recently hit 72.70 basis points, its widest level since April 9. This reflects growing investor concern about the long-term economic outlook. Higher long-term yields have a direct impact on the economy, making everything from mortgages to corporate bonds more expensive.

Warsh has argued that productivity gains from artificial intelligence are disinflationary, giving the Fed room to ease monetary policy. U.S. rate futures markets seem to agree, pricing in expectations for about two quarter-point rate cuts this year, with the first potentially coming at the June 16-17 meeting.

A Contradictory Policy Mix?

While the market is pricing in this outcome, analysts point to a fundamental tension in Warsh's potential approach. Cutting interest rates is a tool to ease financial conditions, while shrinking the balance sheet is a form of tightening. Executing both at once is a complex balancing act.

"It's a tough policy to administer," said Jim Barnes, director of fixed income at Bryn Mawr Trust. "You have one policy that you're using in a dovish fashion like cutting rates, and then you have another policy that you're using that leads to higher rates, like shrinking the balance sheet."

The core challenge is that if the balance sheet shrinks and long-term rates rise, the term premium—the extra yield investors demand for holding longer-term bonds—could also increase. This would counteract the Fed's efforts to ease financial conditions through rate cuts.

"They're going in opposite directions," Barnes added. "You want to cut rates and shrink the balance sheet at the same time. But how do you put that into action? And that's where it becomes problematic."

Volatility on the Horizon

The road ahead is filled with uncertainty. Lou Crandall, chief economist at Wrightson-ICAP, noted that any plan to reduce the Fed's assets involves complex technical issues, particularly around bank liquidity regulations.

Market participants also anticipate a rise in interest rate volatility. Oscar Munoz, chief U.S. macro strategist at TD Securities, described Warsh as a potentially contentious Fed chief due to his past criticism of the central bank. Munoz highlighted Warsh's "notable 180-degree shift in policy priorities" from his previously hawkish stance during the Global Financial Crisis.

Many bond market veterans suspect Warsh may eventually revert to his hawkish instincts, which would further fuel rate volatility. The MOVE index, a key measure of bond market volatility, has been declining for months and has yet to price in the potential disruption from a new Fed chair.

Ultimately, the market is left to wonder about Warsh's true intentions. "He's changed his tune recently, and a cynic may say only to secure the nomination," said Benjamin Connard, portfolio manager at Carnegie Investment Counsel. "Rates are set by the majority, so Warsh alone cannot cut them."

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Manuel

Commodity

Oil refiners on the U.S. Gulf Coast are struggling to absorb a rapid surge in Venezuelan crude shipments since last month's flagship $2 billion supply deal between Caracas and Washington, pressuring prices and leaving some volumes unsold, according to traders and shipping data.

The soft U.S. demand represents an early obstacle for President Donald Trump's hopes of sending the majority of the South American country's oil to the United States since U.S. forces captured Venezuela's President Nicolas Maduro ‌last month in a raid in Caracas.

Trading houses Vitol and Trafigura were granted U.S. licenses to market and sell millions of barrels of Venezuelan oil following the U.S. operation and a subsequent supply agreement with interim President Delcy Rodriguez.

The trading houses, ‌which joined energy major Chevron in holding approval to export Venezuelan oil, struck several early deals to sell some cargoes to refiners in the U.S. and Europe. However, with Chevron also raising exports quickly, the trading companies are now finding it harder to secure enough buyers among Gulf Coast refiners, traders said.

"We're all facing this issue where there's more to place and not enough takers," one of the traders said, citing reluctance from U.S. refiners to buy Venezuelan crude. Some refiners are complaining that prices, albeit declining, remain high compared to competing Canadian heavy grades.

Venezuelan heavy oil cargoes for delivery at the Gulf Coast are being offered at ⁠about $9.50 per barrel below benchmark Brent, versus discounts of between $6 and $7.50 per ‌barrel in mid-January.

Last month, total Venezuelan oil exports to the U.S. almost tripled to 284,000 barrels per day (bpd), according to data based on tanker movements.

The U.S. was absorbing some 500,000 bpd of Venezuelan oil before Washington imposed sanctions on the country in 2019. But exports to the U.S. went to zero in mid-2025 ‍after Trump revoked all licenses to trade and ship.

Reaching the U.S. refiners' maximum capacity again will require time, one of the traders said, in part because some facilities would require adjustments to process heavier oil.

The chief executive of refiner Phillips 66, Mark Lashier, said on Tuesday the company can process around 250,000 bpd of Venezuelan crude, but prices must be competitive for Venezuelan grades to displace other sources of heavy oil.

Chevron and Trafigura declined to comment. Venezuela's state oil firm PDVSA and Vitol did not reply to requests for comment.

INCREASED COMPETITION

Chevron, whose current Venezuela license authorizes it to export to the U.S. only, increased exports to 220,000 bpd ‌in January from 99,000 bpd in December.

Chevron CEO Mike Wirth told investors on Friday that the company's refining network can process up to 150,000 bpd of Venezuela's heavy grades, which implies it must store or market the remaining portion among other refiners.

The firm, which is the only U.S. oil major operating in Venezuela, is producing some 250,000 bpd there. Wirth said the company sees potential for a 50% output increase over the next 18 to 24 months, provided the U.S. authorizes it to expand operations.

Vessel monitoring data this week showed several Chevron-chartered tankers loaded with Venezuelan crude waiting for days to discharge at U.S. ports or slowing down navigation.

A person familiar with Chevron's operations said the company had to negotiate new discharge dates with customers after a U.S. blockade on Venezuela caused shipping delays between December and ⁠January. But all cargoes had been sold before departure, the person added.

Meanwhile, Vitol and Trafigura exported some 12 million barrels - equivalent to around 392,000 bpd - from Venezuelan ports in January, mostly to storage terminals in the Caribbean, the data showed.

Much of it has not yet been sold, sources said.

Total Venezuelan oil exports bounced to near 800,000 bpd last month, from 498,000 bpd in December.

China was previously the top destination for Venezuelan oil, but none has been sent there since Maduro's capture in early January, according to the data. The U.S. said after seizing Maduro ‍that it would control Venezuela's oil sales indefinitely.

While ⁠China is allowed to purchase the oil, it must not be at "unfair, undercut" prices at which Caracas sold the crude previously, a U.S. official said last month.

Beijing has rejected the U.S. takeover of Venezuela's oil exports.

China's state-owned PetroChina, previously the largest receiver of Venezuelan crude, has told traders not to buy or trade Venezuelan oil while it assesses the situation, separate sources ⁠told Reuters last week.

A potential relief valve for the Venezuelan oil could come from India.

On Monday, Trump announced a trade deal with India that slashes U.S. tariffs on Indian goods in exchange for India lowering trade barriers, stopping its purchases of ‌Russian oil and buying oil instead from the U.S. and potentially Venezuela.

India's Reliance Industries last month said it was considering importing Venezuelan oil.

Source: Reuters

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Justin

Commodity

Gold and silver prices rebounded sharply on Tuesday after a steep selloff over the previous two sessions and the bullion was on track for its biggest daily rise since November 2008 as bargain‑hunters stepped in amid resilient underlying fundamentals.

Spot gold rose 6.9% to $4,985.44 per ounce by 11:40 a.m. ET (1640 GMT), recovering from Monday's low of $4,403.24 but still trading below last week's record high of $5,594.82.

U.S. gold futures for April delivery rose 7.7% to $5,011 per ounce.

Gold set for biggest daily rise since 2008

Silver surged 11.7% to $88.74 an ounce on Tuesday, after a record 27% one‑day decline on Friday and falling a further 6% on Monday.

"I view the recent losses as corrective within the long‑term uptrend," said Peter Grant, vice president and senior metals strategist at Zaner Metals. He added that many of the fundamentals that have driven gold higher over recent years remain firmly in place.

"At this point, we are likely to see a period of consolidation, with $4,400 an important support level on the downside and resistance probably around $5,100 on the upside," Grant said.

Precious metals retreated sharply over the past two sessions as Kevin Warsh was named the next head of the Federal Reserve, after Chair Jerome Powell steps down in May. Investors expect Warsh to support rate cuts but tighten the Fed's balance sheet. Additionally, the CME Group raised margin requirements on precious metal futures, which further weighed on prices.

Despite the recent volatility, analysts broadly expect the bull market to continue, with the yellow metal likely to hit fresh peaks later this year.

"We expect prices to resume their longer term rise at a more sustainable pace as investors continue to be extremely concerned about economic and political conditions," said CPM Group managing partner Jeffrey Christian.

Gold is widely regarded as a safe haven and typically performs well in low interest rate environments.

Meanwhile, the U.S. Bureau of Labor Statistics said on Monday the closely watched employment report for January would not be released this Friday due to a partial shutdown of the federal government.

Among other metals, spot platinum climbed 6% to $2,248.20 per ounce, while palladium was up 4.8% at $1,802.43.