The S&P 500 rose 1.38% to 1,721 after the US Senate made a deal to reopen the federal government and raise the debt ceiling. The bill is now heading to the House of Representatives and is anticipated to be voted on soon. If passed, the US would avoid its potential default.

For now, markets are in a good position going forward. If third quarter earnings come in stronger than expected, then stocks could be in for big gains. This is especially true since many stocks are expected to have weaker earnings from the impact of the shutdown — so there is upside potential. In addition, the Federal Reserve has kept its foot on the pedal with quantitative easing at its $85 billion monthly rate. Overall, markets are in for some short-to-medium term gains. Yet, interest rates are likely to rise in coming weeks as uncertainty of the debt ceiling debate is behind us (until Jan/Feb 2014 at least).