Open for Business
Similar to most companies, the major stock markets in the U.S. are only open for trading on normal business days only—Monday to Friday, except on holidays. In terms of holidays, both the New York Stock Exchange (NYSE) and the NASDAQ have very similar schedules to that of the federal government's holiday schedule with a few exceptions:
- The NYSE and NASDAQ are open on Veterans Day and Columbus Day (or the day in which they are observed).
- The NYSE and NASDAQ are closed on Good Friday.
Therefore, these exchanges are closed for trading on the following holidays:
- New Year's Day
- Martin Luther King, Jr. Day
- Presidents' Day (Washington's Birthday)
- Good Friday
- Memorial Day
- Independence Day
- Labor Day
- Thanksgiving Day
- Christmas Day
- Other than Veterans Day, Columbus Day, and Good Friday, the NYSE and NASDAQ exchanges follow the federal government’s holiday schedule for closings.
- The NYSE and NASDAQ are open on Veterans Day and Columbus Day and both are closed on Good Friday.
- The bond market exchanges more closely follow the federal government holiday schedule, including being closed on Veterans Day and Columbus Day.
- There are trends for trading days before and after holidays, such as the S&P 500’s tendency to post a loss on the last trading day of the year.
Foreign Stock Markets
Investors and traders with positions in foreign stocks need to keep in mind that not all countries have the same holidays and that foreign stock exchanges may continue to trade on days that the U.S. markets are closed and vice versa.
For example, since Canadian Thanksgiving day is a different day compared to the U.S. Thanksgiving (the second Monday in October, compared with the fourth Thursday in November), all Canadian listed stocks on the Toronto Stock Exchange (TSX) would not be trading on Canadian Thanksgiving but would continue trading on the date the American Thanksgiving falls upon.
If a holiday falls on a weekend, the exchange is closed on the Friday before or the Monday after.
Other Financial Markets
The U.S. bond market exchanges holiday closings are more loosely governed and tend to follow the recommendations of the Securities Industries and Financial Markets Association (SIFMA). They do, however, parallel those of the equity exchanges above, though Columbus Day and Veterans Day are included in the SIFMA recommendations, and thus, the bond market is closed on these days.
Another market that many investors follow is the Chicago Board Options Exchange (CBOE). These also parallel the NYSE and NASDAQ holidays. Like many employers, CBOE grants an extra weekday day off if a holiday falls on a weekend. If a holiday falls on Saturday, CBOE closes the preceding Friday and if it falls on a Sunday, CBOE markets are closed the Monday after. Trading sessions tend to close early the day before a holiday, too.
The NYSE and NASDAQ will close early on two days in 2020—the day after Thanksgiving Day, and the day before Christmas Day.
Facts About Trading Around Holidays
Seasonality can sometimes play a part in a trading strategy. Some holidays in the U.S. market provide periods of decreased trading volumes, as many investors and traders are busy with vacations and family plans. There tends to be little business news released right before a holiday, too.
The S&P 500 tends to trade at a loss on the last trading day of the year and gains on the first day of the new year. Trading days before and after Jan. 1 can be affected by tax gain/loss harvesting and portfolio rebalancing.
Sometimes the pattern is reversed, with advances the day before the holiday and declines the day after. There are usually gains on the Thursday before Good Friday and losses on the trading day after. Presidents' Day tends to have losses on both days, before and after. In contrast, both Christmas and Thanksgiving see gains on both days.