The US government shutdown has thrown a wrench into one of Wall Street’s most promising rebounds, the booming initial public offering (IPO) market.
After two sluggish years, 2025 was shaping up to be the best year for IPOs since the pandemic-era highs of 2021. According to Renaissance Capital cited by The Associated Press, companies have already raised $31 billion across 163 deals so far this year.
But now, that momentum is at risk. With the Securities and Exchange Commission (SEC) operating on skeletal staff amid the government shutdown, the process of reviewing and approving IPO filings has slowed to a crawl, or stopped altogether.
“The shutdown is waving a caution flag at private companies racing to go public,” The Associated Press reported.
Why the shutdown matters for markets
The SEC’s role in greenlighting IPO filings is crucial, it vets companies’ financial disclosures, compliance, and investor protection measures before they can list publicly.
With staff furloughed and only essential operations running, dozens of companies are stuck mid-process. Analysts say the delay could stretch well into the fourth quarter if the political impasse continues.
“It reminds you that we’re not operating in normal times,” said Samuel Kerr, head of global equity capital markets at Mergermarke, to AP.
The fallout goes beyond bureaucracy. A prolonged shutdown risks shaking investor confidence in US markets just as companies and investors were regaining their appetite for risk after years of volatility. IPO activity traditionally peaks through October, before cooling toward the end of the year, meaning every lost week now hurts.
What’s at stake and who’s waiting
Investors have been increasingly drawn to IPOs this year as traditional stocks, especially in tech, look expensive. IPOs offered a fresh entry point into the market, particularly in high-growth areas like cryptocurrency, AI, and cloud computing.
Some of 2025’s standout listings include:
- Circle Internet Group, issuer of the USDC stablecoin, which made its public debut in June, raising $1.1 billion. Shares soared from $31 to around $152.
- Bullish, a crypto exchange, raised another $1.1 billion in August.
- CoreWeave, a cloud-computing player, pulled in $1.5 billion when it went public in March.
- Klarna, the Swedish “buy now, pay later” firm, had 2025’s biggest IPO, raising $1.37 billion in September, with shares now trading slightly above their $40 issue price.
Together, these offerings helped restore some faith in Wall Street’s new-issue pipeline, faith that now hangs in the balance.
A strong year, suddenly uncertain
Despite global headwinds, from inflation and a softening job market to shifting Federal Reserve policy, the US stock market has repeatedly hit new highs this year. Investors and companies alike were betting on a “soft landing” narrative and an open IPO window.
Now, as the shutdown drags on, those bets are in limbo.
“The IPO market still has a bit of gas in the tank,” said Bill Smith, CEO of Renaissance Capital, in a note to investors. But he acknowledged that if the stalemate continues, that gas could evaporate quickly.
For now, IPO hopefuls, from fintechs to biotech firms, are stuck watching Washington. The market’s fate may depend less on balance sheets and more on political brinkmanship.
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