The U.S. stock market will be closed on Thursday, Nov. 28, for Thanksgiving, and trading will resume on Friday to wrap up a strong November.
But before it does, let’s examine the historical trends that could shape the market’s performance in the coming sessions.
Thanksgiving week has historically been bullish. Over the past 50 years , the S&P 500 (SPX) has averaged a 0.6% gain, with 70% of returns positive.
In comparison, other weeks show a smaller average gain of 0.2%, with positive returns only 56% of the time.
By day, Monday has been slightly negative but averages a small gain of 0.2%.
The day before Thanksgiving is historically a strong performer, with Wednesday showing positive returns 76% of the time and an average gain of 0.3%.
Other days typically see less volatility.
Historically, the S&P 500 has risen 60% of the time during Thanksgiving week, with an average return of 0.3% and a median gain of 0.5% since 1928.
In presidential election years, the index has traded up 75% of the time, with an average return of 0.9% and a median gain of 1.1%.
However, the week following Thanksgiving in election years tends to be weaker, with the S&P 500 down 67% of the time, showing an average loss of 1.1% and a median decline of 0.7%.
Despite this, buying during the post-Thanksgiving dip in presidential election years has historically paid off, with the S&P 500 up 75% of the time from Thanksgiving to year-end, showing an average return of 1.4% and a median gain of 1.6%.
According to FactSet data , the S&P 500 has already seen a significant rally in 2024, up by 26% through Monday.
While the median gain for the final week of November is nearly double the historical average for one-week periods since 1945, analysts noted that the median return has typically been in line with the average of 0.2% when the year-to-date gain exceeds 20%.
Black Friday, the day after Thanksgiving in the U.S., is a major retail event that provides insights into consumer spending and investor confidence.
Strong Black Friday sales suggest a profitable shopping season, often reflected in rising retail stock prices. However, disappointing sales can signal reduced consumer spending, causing market reactions.
In 2023, 200.4 million shoppers spent over $966 billion from Thanksgiving through Cyber Monday. Popular items included food, decorations, clothing, and electronics.
Investors use Black Friday sales to gauge the retail sector. Lower sales might indicate slower economic growth. Markets typically see increased trading activity and higher returns before holidays, known as the “holiday effect.”
From 2001 to 2023, the S&P 500’s performance around Thanksgiving was mixed, with positive returns about half the time. The retail sector, however, usually outperforms the broader market during this period.