New Year’s Day is a holiday for the US stock markets. Both the NYSE and the NASDAQ are closed on January 1. The first trading day of 2026 is on Friday, January 2, for the US equities market. Apart from January 1, the NYSE and NASDAQ will be closed on other occasions such as Martin Luther King Jr. Day, Presidents’ Day, Memorial Day, Juneteenth, Independence Day (observed if July 4 falls on a weekend), Labor Day, Thanksgiving, and Christmas.
Martin Luther King Jr. Day is on January 19, President’s Day is on February 16, April 3 is a holiday on account of Good Friday, May 25 is Memorial Day, and June 19 is a holiday on account of Juneteenth. Independence Day is observed on July 3, Labor Day on September 7, November 26 is Thanksgiving and December 25 is Christmas, which are holidays. On November 27 and December 24, the exchanges will close early as they are the day after Thanksgiving and Christmas Eve, respectively.
While this is the schedule for the equities market, the bond markets’ holiday schedule has two more holidays in addition to the above: Columbus Day on October 12 and Veterans’ Day on November 11.
Holidays’ Effect On Stock Market Trading
No trading activity will be done on the stock exchanges during holidays. The liquidity of the assets on these days will be reduced, and the nil trading volume increases volatility. To navigate these issues, traders often foresee the likely issues on a holiday and take the necessary measures to plan and adjust their strategies.
There are historical data showing that November to January are slow in trading due to a number of holidays. In the equities market, lower trading volumes have increased the opportunity costs. Fixed incomes decline by 20% to 40% during this holiday season. As liquidity is constrained, execution takes longer.
Historically, liquidity on foreign exchanges has declined during this time of the year. Market depths weaken even though book pricing may remain intact. However, large traders suffer. Christmas Eve and Boxing Day are historically dull for foreign exchange markets all over the US.
Over the last ten years, the derivatives market has gone below 40% of its usual activity. Traders’ participation in global futures and options trading also historically sees a significant low during this season. These holidays have a significant impact on liquidity, spreads, and opportunity costs, which, if managed properly, will not have any adverse effect on profitability.
Navigating The Holiday Lull
There are several navigation strategies that traders often use to cope with the losses on holidays. Traders plan to rebalance portfolios early on to avoid thinning on liquidity. They prioritize high-volume stocks to maintain liquidity. Losses can be reduced by reducing positioning sizes, waiting for high-conviction setups, and using limit orders to manage spreads. Exploiting patterns like buying pre-holiday or post-Thanksgiving for historical edges, while monitoring global markets open during US closures and investing in them, can also save traders from low liquidity and trading volume.
