You've probably heard the old saying, "Sell in May and go away." It sounds like solid advice from a weathered floor trader, but honestly, the reality of the memorial day stock market is a lot messier than a catchy rhyme. Most people assume the long weekend is just a dead zone where nothing happens. They figure everyone is at a barbecue or the beach, so they might as well ignore their portfolios.
That's a mistake.
While the physical trading floors in New York go quiet, the days surrounding the holiday often produce some of the weirdest, most specific price action of the year. If you aren't paying attention to the "getaway day" or the post-holiday drift, you're basically flying blind during one of the market's most distinct seasonal shifts.
Is the Stock Market Open on Memorial Day?
No. Let's get the easy stuff out of the way first. For 2026, the memorial day stock market schedule is pretty straightforward: the New York Stock Exchange (NYSE) and Nasdaq will both be closed on Monday, May 25.
But it's not just a Monday thing. The ripple effect starts early. On Friday, May 22, the bond market—specifically the U.S. dollar-denominated fixed income securities—usually shuts down early at 2:00 p.m. ET, following SIFMA recommendations.
The equity markets stay open until 4:00 p.m. ET on that Friday, but don't expect a lot of fireworks. Volume typically falls off a cliff after lunch as traders head for the exits. This creates a "low liquidity" environment. When there are fewer people buying and selling, a single large order can move the price way more than it normally would.
The Weird Psychology of the "Pre-Holiday Effect"
There is a documented phenomenon called the Pre-Holiday Effect. Researchers like Jeffrey Hirsch, editor of the Stock Trader's Almanac, have spent decades looking at this. Basically, the stock market has a weird tendency to rally on the last trading day before a long weekend.
Why? It’s mostly psychological.
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Traders are in a good mood. They’re thinking about the three-day break. Short-sellers, who bet on prices going down, often close out their positions before the weekend because they don't want to risk some crazy news breaking while they’re away from their desks. This "short covering" can push prices up.
Since 1971, when Memorial Day was moved to the last Monday in May, the Friday before the holiday has historically leaned bullish. However, recent data from Schaeffer's Investment Research suggests this trend is fading. Over the last 15 years, the Friday before Memorial Day has actually averaged a slight decline of 0.46%. It seems the "getaway" is now more about selling than buying.
What Happens When the Bells Ring on Tuesday?
This is where it gets interesting. When the market reopens on Tuesday, May 26, it has to digest three days' worth of global news. If something happened in Europe or Asia over the weekend, the U.S. market has to "gap" up or down to catch up.
Historically, the week following the holiday has been a bright spot. According to some studies, the S&P 500 averages a 0.5% gain in the week after Memorial Day. That's significantly higher than a normal week's average of about 0.17%.
The Best (and Worst) Stocks to Watch
Not every company reacts the same way to the holiday. If you look at the last decade of data, specific sectors tend to pop.
- REITs and Real Estate: Companies like American Tower (AMT) have historically been green 90% of the time during Memorial Day week.
- Video Games: Electronic Arts (EA) is another frequent winner. Maybe it's because people are home playing games? Or maybe it's just seasonal rotation.
- The Travel Sector: This one is a bit of a trap. People assume airlines and hotels will soar because everyone is traveling. In reality, the "travel trade" is often priced in weeks before the holiday. By the time Memorial Day hits, investors are already looking at Labor Day or Q3 earnings.
On the flip side, bank stocks and large brokerages have a nasty habit of underperforming during this specific week. If you're heavy on financials, you might see some red while everyone else is enjoying the "summer rally" vibes.
Strategic Moves for Your Portfolio
So, what should you actually do with this information?
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First, check your stop-loss orders. Because liquidity is low on the Friday before the holiday, "flash" moves can trigger your sell orders unnecessarily. Some traders widen their stops or remove them entirely for the 48 hours surrounding the holiday to avoid getting "stopped out" by a random price spike.
Second, watch the 1:00 p.m. to 2:00 p.m. window on Friday. This is when the big institutions often finish their "rebalancing" for the month. Since Memorial Day falls near the end of May, this is often the last chance for fund managers to clean up their books before June begins.
Actionable Insights for the 2026 Memorial Day Break
Don't treat the memorial day stock market closure as a reason to go totally dark. Use the weekend to reset your perspective.
- The Friday Fade: Expect volume to dry up by 1 p.m. ET on May 22. If you need to make a large trade, do it early in the morning or wait until the following Tuesday.
- The "Gap" Strategy: If you're an options trader, be wary of "time decay" (theta) over the long weekend. Holding a position over three days when the market is closed means you're losing value while you sleep, even if the stock doesn't move.
- Watch the PCE: In 2026, keep a close eye on the Personal Consumption Expenditures (PCE) report if it’s scheduled for late May. This is the Fed's favorite inflation gauge. If it drops the Friday before the holiday, it could supercharge a post-holiday rally.
- Check the Overseas Markets: On Monday, while the U.S. is closed, the London Stock Exchange and Tokyo are often open. Their performance on Monday morning is a huge "tell" for how the S&P 500 will open on Tuesday.
Instead of just checking out, set price alerts for the "M+1" day (the Tuesday after). If the market opens with a massive gap, it often sets the tone for the entire month of June. Be ready to move, or be ready to sit on your hands—either way, don't be the person who gets surprised by a holiday schedule.