Wall Street rallied Monday as a tech-led advance and a wave of high-profile deals overcame lingering worries about a looming government shutdown, sending risk appetite higher across equities and deal desks. The tone shifted decisively after Jefferies released robust third-quarter results in late trading, reporting a sharp rise in net revenue and record investment-banking advisory fees amid a revived pipeline of transactions.

“Interest rates are starting to come down, the economy is holding up, business confidence is reasonable and, as a result, M&A activity continues to pick up,” Jefferies Chief Executive Brian Friedman told Reuters, summing up the logic behind the firm’s stronger performance and its upbeat outlook for 2026 deal flow. Jefferies’ results appeared to reinforce a narrative that cheaper financing and healthier corporate cash flows are again supporting mergers, acquisitions and other strategic transactions.

Policy developments amplified the market’s reaction. Traders were pricing roughly a 90 percent chance of a 25-basis-point Federal Reserve cut at the Oct. 28–29 meeting, and several Fed officials have signaled comfort with easing if labor-market data soften. “Recent signs of labor-market weakness increase my support for rate cuts,” New York Fed President John Williams said Monday, echoing a dovish tilt among policymakers that investors interpreted as reopening the path to lower borrowing costs.

Goldman Sachs added to the bullish backdrop by raising its year-end S&P 500 target to 6,800, signaling roughly 5 percent upside from current levels and highlighting resilient corporate earnings as a key underpinning. The combination of falling short-term yields and rising confidence in earnings has pushed capital back into higher-growth sectors, with technology names, particularly those tied to artificial intelligence and cloud infrastructure, leading the advance.

Market strategists said the rally underscored how sensitive modern financial markets are to the interplay between central-bank policy signals and corporate activity. Easier financing lowers discount rates and makes leveraged deals more viable, fueling a virtuous loop: stronger deal flow boosts advisory fees at banks, supports hiring and investment in high-margin tech companies, and in turn bolsters investor sentiment.

That optimism, however, is not unalloyed. A partial government shutdown would carry tangible economic costs—delaying federal contracts, furloughing workers and potentially denting consumer and business confidence—risks that could sap growth if prolonged. Investors are also mindful that any resurgence in inflation or unexpected hawkish language from the Fed could quickly reverse recent gains.

For now, the market is betting that policy will swing to the consumer’s and corporate sector’s advantage, while dealmakers push forward with transactions put on hold during last year’s higher-rate environment. Whether that dynamic sustains a multi-month ascent in equities will depend on incoming economic data, the trajectory of yields and whether deal pipelines translate into completed transactions and durable earnings upgrades.