US Stocks Historically Perform Well During Thanksgiving Week
It’s a short week for US markets, with closures on Thursday and half-day trading on Friday. Crypto markets will continue to operate during the holiday. This report examines historical US equity performance during this period and projections for the upcoming days.
Historical Performance
Stocks generally perform well during Thanksgiving week. Since 1928, the S&P 500 has finished higher 60% of the time post-holiday. In presidential election years, this increases to 75%, with an average return of 0.88%, according to Bank of America Global Research. The Nasdaq Composite has shown similar trends, ending last Thanksgiving week 2.4% higher, continuing a strong month. The Dow Jones Industrial Average and S&P 500 also recorded gains of 1.9% and 2.2%, respectively, by Black Friday 2023.
Market Reactions
On Tuesday, equities were trending upwards amidst President-elect Donald Trump’s comments regarding tariff plans, which include 25% tariffs on imports from Mexico and Canada and an additional 10% fee on goods from China. This announcement led to declines in both the Canadian dollar and Mexican peso against the dollar.
Midway through Tuesday's session, the S&P 500 was up 0.3% since the week's start while the Nasdaq Composite remained flat. Stocks appeared largely unaffected by Trump's remarks, suggesting investors are awaiting further clarity on potential policies post-Inauguration Day. By 2 pm ET, the S&P 500 and Nasdaq Composite indexes were trending 0.4% and 0.5% higher, respectively.
Outlook
If the upward trend persists, stocks could finish November positively. Both the S&P 500 and Nasdaq Composite have increased nearly 5% since the start of the month. Upcoming economic reports may influence market movements, particularly expectations around a possible interest rate cut from the Federal Reserve in December. Initial jobless claims for the week ending Nov. 23 will be released at 8:30 am ET, followed by October’s PCE index at 10 am. The probability of a 25-basis point interest rate cut next month rose to 59% as of Tuesday, up from 52% the previous day, according to CME Group data.
With one and a half trading days left in the week, continued positive momentum is anticipated.