The US stock market is a complex and ever-changing entity. With 9 trading holidays, several scheduled semesters, and circuit breakers, it can be difficult to keep up with the latest news and trends. Kiplinger has the support of its audience to help you become a smarter and better informed investor. Here's what you need to know about the US stock market, from trading hours to liquidity and more.
The three major stock exchanges in the US are the New York Stock Exchange (NYSE), the Automated Listing System of the National Securities Brokers Association (NASDAQ), and the United States Stock Exchange (AMEX). The other stock exchanges are the Boston Stock Exchange (BSE), the Chicago Board Options Exchange (CBOE), the Chicago Board of Commerce (CBOT), the Chicago Mercantile Exchange (CME), the Chicago Stock Exchange (CHX), the International Stock Exchange (ISE), the Miami Stock Exchange (MS4X), the National Stock Exchange Exchange (NSX) and the Philadelphia Stock Exchange (PHLX).The stock market holds a full day of trading on New Year's Eve due to a provision of Rule 7.2 of the New York Stock Exchange. The rule states that the New York Stock Exchange will close on Friday or Monday when a holiday falls on a weekend. However, a provision exists when there are “unusual” business conditions, such as the end of a monthly or annual accounting period.
Since New Year's Eve is the end of a month, quarter and year, markets remain open. The stock market closes on New Year's Day, Martin Luther King, Jr. Day, President's Day (Washington's birthday), Good Friday, Memorial Day, National Independence Day, Independence Day, Labor Day, Thanksgiving and Christmas Day. The NYSE and NASDAQ comply with the federal government's holiday closure schedule, except for Veterans Day (open), Hispanic Heritage Day (open) and Good Friday (closed).Under certain circumstances, the stock market will close early on days before or after market vacations. The New York Stock Exchange and Nasdaq will close at 1 p.m.
on the day after Thanksgiving; Christmas Eve, if it falls on a working day; and July 3, if both July 4th and July 4th fall on a working day. Trading volume tends to fall immediately before holidays and increases immediately after holidays. This can add volatility to the market. Statistically, mood swings before and after holidays can affect actions. Stock markets win the day before a holiday and trading volume can be ten times higher after a holiday.
However, these notable market trends only occur if the holiday involves a long weekend. One of the main reasons for trading hours is liquidity, which is the number of purchases and sales that are made at any given time. The more liquidity a particular security has, the more likely it is to get a fair price; the lower the liquidity, the more likely it is to settle for a less than ideal price to complete a transaction. Circuit breakers are meant to curb panic selling. Like calling for a time-out in sports, a temporary pause in trading allows market participants to catch their breath, although it doesn't necessarily prevent stocks from falling once trading resumes. When markets close, investors have more time to reflect on their investment strategies. An investor can read a financial diary to catch up on the latest news, read about insider trading, NASDAQ's top losers or marketing activity.
Catching up with the latest market news will create an overview of what is happening. An investor could also improve their financial education by reading a dividend investment guide to learn more about stocks, trading volumes, most active stocks or market liquidity. All this reflection on the market often provides investors with information on how to improve their investment strategy. Since holidays are often some of the happiest times of year they can alleviate some of stress associated with active operations.
This positivity and optimism influence operations after holidays.