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The S&P 500 has its best track record when July 4 falls on a Monday.
Spencer Platt/Getty Images
US markets will take a break for July 4 on Tuesday, but if history is any indication, preparing for America’s birthday could be good for investors.
The New York Stock Exchange and the
Nasdaq Stock Exchange
are both open Monday, July 3—and
S&P500
can see gains. According to Dow Jones Market Data, the index has climbed on the last trading day before July 4 in 67 of the past 95 years. The S&P 500 has also seen these gains in eight of the past 10 years.
From 1928 to 2022, the S&P 500 has gained an average of 0.39% the last trading day before July 4. It has topped that average for the past four years, closing at least 0.45% ahead of the holiday.
Market performance before Independence Day is highly dependent on which day of the week the holiday falls on. The S&P 500 has its best track record when July 4 falls on a Monday. This is because the market does not close early on the Friday before the bank holiday weekend. If the holiday falls on another day of the week, US stock exchanges typically halt trading at 1 p.m. the previous day, resulting in a decrease in the volume of shares traded.
In 2011 and 2022, the two years in which July 4 fell on a Monday, the S&P 500 posted one-day gains of 1.44% and 1.06%, respectively, on the previous Friday.
The market’s worst performance before Independence Day came on July 2, 2009, when all three major indices fell amid dire economic conditions. From 1953 to 1969, the S&P 500 gained on the last trading day before July 4 for 16 consecutive years.
The average trading volume for the Nasdaq and New York Stock Exchange on the eve of Independence Day over the past 14 years is about five billion, or about 70% of the combined average daily volume seen on all other days. scholarship during this period.
But the pre-holiday trading volume has increased. Over the past three years, combined trading volume has hovered between around seven and nine billion shares on the eve of July 4, a jump from the pre-holiday volume of the previous 11 years, which had remained between three and six billion shares.
The volume of shares traded on the eve of Independence Day in 2022 reached nearly nine billion, more than 720 million shares more than the previous high in 2020. This matches record highs in trading volumes headlines that the market has seen since 2020 due to increased retail investor engagement.
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