Will investors benefit from the Good Friday respite in this turbulent year?
Ahead of this week’s Christian holiday, some people might be wondering that. On Friday, the New York Stock Exchange and the Nasdaq, two significant stock marketplaces, will be closed. Similarly, the bond markets will close early on Thursday at 2 p.m. Eastern, which is also known as Maundy Thursday or Holy Thursday in the Christian calendar.
According to data from StockTradersAlmanac.com and @AlmanacTrader, the week leading up to Good Friday has historically been a good one for investors, with the S&P 500 SPX rising 0.9% on average since 1980, the Dow Jones Industrial Average DJIA rising 0.85%, and the Nasdaq Composite COMP rising 1.3%. For all weeks during the same historical time, the S&P 500 and Dow had an average increase of 0.19%, while the Nasdaq saw an average gain of 0.24%.
The major indexes have also seen positive returns from trading on the Thursday before Good Friday, with the S&P up an average of 0.38% since 1980, the Dow up 0.3%, and the Nasdaq up 0.46%. During the same historical period, the S&P 500 and Dow saw an average daily increase of 0.04%, while the Nasdaq saw a gain of 0.05%.
However, considering the volatility in recent weeks around President Donald Trump’s tariff intentions and the nearly daily statements from the president or members of his administration, market watchers are reluctant to place too much weight on such data this year.
According to investor and chair of the Patriarch Organization, a venture-capital business based in Los Angeles, “Past performance is no promise in a tariff world,” stated Eric Schiffer.
According to economists, there are several reasons why the market may climb before Good Friday. First of all, experienced traders may choose to purchase stocks to cover their short positions during the prolonged break from trading, just in case any market-moving news breaks during the pre-holiday period. This makes pre-holiday periods generally favorable.
Dave Weisberger, a seasoned market strategist and financial adviser, stated that “more can happen geopolitically over a three-day weekend” as opposed to a two-day one.
Weisberger admits that the opposite can be true, that traders might sell ahead of a holiday to cover their long bets, which would cause prices to decline. However, he said that because of the inherent borrowing costs, there is typically more pressure to cover short positions.
Furthermore, for its own reasons, Good Friday can encourage purchasing. One of the most important ones, at least for individual investors, is that many may be waiting for tax returns this time of year or maybe witnessing the money actually arrive in their bank accounts.
Christopher Grisanti, chief market strategist at Cleveland-based MAI Capital Management, stated, “There might be some extra liquidity there.”
Others pointed out that springtime is typically a time of optimism, which naturally carries over into the markets.
“Seasonality is a real human phenomenon,” stated Chris Barnes, head of the data analytics company Escalent.
However, experts point out that there is too much uncertainty in the current tariff-driven market condition to make any firm predictions. And while it may be argued that the Christmas season is perfectly positioned to provide investors with a pause that could aid in market recovery—think of it as a full-day circuit breaker—this may not be the case in this instance due to the constantly shifting tariff news.
“Does this breather come with a Thursday-night news dump?” is another way Barnes said it.
Investors may want to pay attention to another historical trend even if markets do climb this Thursday and during the Good Friday week: Historically, the Monday following the holiday weekend, which includes Good Friday and Easter Sunday, has been a bad one. Data from StockTradersAlmanac.com and @AlmanacTrader shows that since 1980, the S&P 500 has lost an average of 0.18%, the Dow by 0.13%, and the Nasdaq by 0.25%.
In any case, given the recent volatility, Grisanti of MAI Capital Management noted that the approaching market holiday is particularly welcome.
“I don’t know anyone in our business who isn’t dying for a breather,” he stated.
