Most people are waiting for a breakout, but I see it differently: I think we’ll see a drop first. The drama in Washington is pretty interesting. Luna is flipping the table. On the surface, it looks like a personal attack, but in essence, it’s a public vote of no confidence in Republican leadership from within the party. Don’t rush to take sides. The market impact of something like this isn’t about who wins or loses, but whether it disrupts the pace of policymaking. There have been plenty of similar episodes in the past: In 2013, the U.S. government shut down for 16 days, and the S&P 500 fell about 3% early in the standoff before rebounding as expectations of a compromise grew. After McCarthy was ousted as speaker in 2023, the House speaker election dragged on for more than three weeks, during which budget and appropriations efforts were clearly stalled. Even if a motion like Luna’s public challenge fails, it can make leadership more reliant on party hardliners to pass legislation, stretching out the policy implementation timeline. The policy uncertainty index often jumps when divisions within a party deepen, and companies also tend to be more cautious with capital expenditures and buybacks. That’s what the market really needs to price in.

Liquidity is thin in the Asian session, and this kind of political noise often triggers irrational price moves. Take S&P 500 futures, for example: Trading volume in the early Asian session is usually only 30% to 40% of that during the same period in the U.S. session. With order books thin, a single breaking news story can send prices through a key level, while slippage also increases. During the 2023 debt ceiling negotiations, for instance, a report that talks had “broken down” sent futures plunging more than 1% in the early Asian session, only for them to recover after the U.S. session opened. Those who chased the short trade ended up trapped. So at times like this, don’t rush to explain price moves based on the news. Instead, it can be a good opportunity to observe the wisdom of the crowd—when everyone is focused on the same thing, it’s often already been priced in. When bullish sentiment, options skew, and search interest are all crowded to one side, there’s less marginal information, and prices are more likely to be driven by liquidity than fundamentals. More thoughts in the comments.