President Donald Trump is using the latest government shutdown showdown to flex political muscle — and it could put the brakes on Wall Street's hottest IPO run in years.
What’s Happening?
The federal government remains shut down. Republicans and Democrats are at odds over enhanced Affordable Care Act subsidies, delaying a funding agreement.
On Thursday, Trump called the shutdown "an unprecedented opportunity" to fire workers and make "irreversible" cuts to what he dubbed "Democrat Agencies." He also met with budget director Russ Vought to discuss "temporary or permanent" spending cuts, echoing themes from the conservative policy blueprint known as “Project 2025,” which Vought advised.
Trump denied knowledge of the project ahead of the 2024 presidential election.
Why This Matters For IPOs
The drama in Washington comes just as the IPO market was heating up. U.S. IPOs posted their best quarter in years, generating $36.4 billion in exit value — a 2,861% jump from the prior year, according to PitchBook. Globally, IPOs have pulled in $88.1 billion so far this year.
Among the standouts were CoreWeave (NASDAQ:CRWV), SailPoint (NASDAQ:SAIL), Figma (NYSE:FIG), Chime Financial (NASDAQ:CHYM), Circle Internet Group (NYSE:CRCL), Galaxy Digital (NASDAQ:GLXY), eToro (NASDAW: ETOR) and Klarna Group (NYSE:KLAR).
But all of that momentum could stall. Companies seeking to go public must submit their registration documents to the Securities and Exchange Commission (SEC) for review and approval. If the government shuts down, the SEC won't have the staff to process filings. No stamp, no stock market debut.
And it's not just about paperwork. Many companies rely on SEC feedback during their IPO roadshows — the final sprint of investor meetings before pricing shares. Without that back-and-forth, deals could stall indefinitely, making markets skittish just as confidence was returning.
Who’s Involved?
Only a handful of companies had already priced their deals before the shutdown threat. For instance, Commercial Bancgroup, Inc‘s (NASDAQ:CBK) IPO took place on Thursday, October, 02 on the NASDAQ exchange. The Harrogate, Tennessee-based bank priced between $25.75 and $27.75 per share.
- See also: Benzinga IPO Calendar
Neptune Flood Insurance (NYSE:NP) also went public this week. According to Reuters, other IPOs—baby food company Once Upon a Farm and electric-aircraft maker Beta Technologies—are “in limbo.”
Laundry equipment provider Alliance Laundry Holdings is also queued up to go public on the Nasdaq on October 9.
What’s The Market Reaction?
Markets have historically weathered shutdowns, including the last one (the longest in history at 35 days) during Trump’s first administration. The U.S. economy incurred costs of approximately $11 billion and $3 billion in gross domestic product, according to the Congressional Budget Office. This time, we’re facing high valuations, inflation pressures, and an AI-driven rally.
Carson Group’s data shows that stocks ticked slightly higher during the previous 22 shutdowns, “but a year later, they have been higher 19 times and increased by an average of nearly 13% a year later.”
The pause in federal data releases adds to uncertainty, with the September jobs report shelved and the Federal Reserve weighing an October rate cut amid signs of slowing private payrolls.
What Happens Next?
Government shutdowns are more often threatened than realized, but the stakes this time may be higher. Trump's talk of mass layoffs and agency dismantling suggests the White House sees more than short-term budget leverage.
For markets — especially the IPO market — that uncertainty could be enough to turn a hot streak ice-cold.
Now Read:
- Trump Administration Warns Of $15 Billion Weekly GDP Loss, Over 43,000 Job Cuts If Shutdown Persists
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