European Markets Rally on U.S. Government Shutdown Resolution and Swiss Tariff Relief Optimism

This analysis is based on the CNBC report [1] published on November 11, 2025, which covered European market performance amid positive developments in U.S. political and trade policy.

European markets demonstrated robust performance on November 11, 2025, with the pan-European Stoxx 600 index recording a provisional gain of 1.3% [0][1]. This positive momentum was directly linked to the U.S. Senate’s bipartisan approval of a funding bill with a 60-40 vote on November 10, which would end the 41-day government shutdown - the longest in U.S. history [2]. The bill extends funding through January 30 and has received President Trump’s support, who characterized the deal as “very good” [2].

The resolution of political uncertainty in the U.S. provided a significant boost to global investor sentiment, with all major European bourses and sectors trading in positive territory [1]. The FTSE 100 reached new record highs, gaining 1.2% for the session, while the DAX and CAC 40 posted gains of 0.6% and 1.13% respectively [0][1].

Swiss stocks exhibited particularly strong performance, with the SMI index surging almost 2% by the closing bell [1]. This rally was primarily driven by optimism over potential U.S. tariff reductions, as President Trump announced that the U.S. is “working on a deal to get their tariffs a little bit lower” for Switzerland [3]. Bloomberg reports suggest Switzerland is close to securing a 15% tariff rate, substantially down from the punitive 39% duty imposed in August [2].

The tariff relief would provide substantial benefit to Swiss exporters, which had been severely impacted by the original 39% duty. Swiss exports to the U.S. collapsed by approximately 56% year-over-year in September after companies front-loaded shipments in July ahead of the tariff implementation [3]. Key beneficiaries of the tariff optimism included:

• Swatch Group
  : Advanced 6% [1], with other reports indicating 4.2-4.3% gains [2][4]
• Richemont
  : Up 2% [1], with gains of 1.8-2% reported elsewhere [2][4]
• Givaudan
  : Rose 1.9% [1]

Vodafone Group (VOD) stood out with an 8.3% gain after reporting strong first-half fiscal 2026 results, with total revenues reaching €19.6 billion ($22.7 billion), reflecting a 7.3% increase [1]. Recent market analysis confirms Vodafone’s revenue grew 7% for H1 as the German market returned to growth [5].

Currency and bond markets also reflected the improved sentiment. The British pound clawed back earlier losses against the dollar, though still down 0.17% at $1.315 after a surprise slowdown in U.K. wage growth to 4.6% in the third quarter [1]. U.K. government bond yields fell across all maturities, with the 10-year benchmark dropping almost 8 basis points to 4.386%, indicating reduced inflation expectations [1].

The current market rally reflects two significant converging developments: the resolution of U.S. political uncertainty and potential trade policy relief for export-oriented economies. The end of the government shutdown removes a major source of market uncertainty that had been weighing on global investor sentiment, while the prospect of tariff reduction for Switzerland specifically benefits luxury goods and export sectors [1][2][3].

The broad-based nature of the gains, with all major bourses and sectors in positive territory [1], suggests strong underlying market confidence. However, the sustainability of this rally depends on several factors, including the successful passage of the funding bill through the House and finalization of Swiss tariff negotiations.

Swiss markets outperformed their European counterparts, with the SMI’s nearly 2% gain significantly exceeding the Stoxx 600’s 1.3% rise [1]. This divergence highlights the market’s specific optimism about Swiss-U.S. trade relations and the disproportionate impact of tariff policies on export-dependent economies.

1. House Vote Uncertainty
   : While the Senate has passed the funding bill, the Republican-controlled House has a narrow majority, and the funding bill may face opposition from conservative members, potentially delaying the shutdown resolution [2].

2. Tariff Negotiation Risks
   : The Swiss tariff reduction is not finalized, with President Trump stating he “hasn’t set any number” yet [3]. Any breakdown in negotiations could reverse the recent gains in Swiss stocks.

3. Economic Data Concerns
   : The surprise slowdown in U.K. wage growth to 4.6% in the third quarter [1] could signal broader economic weakness that may affect corporate earnings going forward.

1. Swiss Export Recovery
   : Successful tariff reduction from 39% to around 15% would provide substantial relief for Swiss exporters, particularly luxury watchmakers with significant U.S. exposure [3].

2. European Market Momentum
   : The resolution of U.S. political uncertainty could sustain the current positive momentum across European markets, particularly in export-dependent sectors.

3. Currency Positioning
   : The improved risk sentiment may create opportunities in currency markets, particularly for the pound and euro against the dollar.

The November 11, 2025 European market rally was primarily driven by two catalysts: the U.S. Senate’s approval of a funding bill to end the 41-day government shutdown [2] and optimism over potential Swiss tariff reductions from 39% to around 15% [2][3]. The Stoxx 600 gained 1.3%, with the FTSE 100 reaching record highs [0][1]. Swiss stocks outperformed significantly, with the SMI up nearly 2%, led by luxury goods companies [1]. Market breadth was strong across all major European bourses and sectors [1]. However, key uncertainties remain regarding the House vote timing and final tariff negotiation terms [2][3]. The U.K. showed mixed signals with slowing wage growth but falling bond yields [1].