When is the Stock Market Closed?

December 16, 2020 · 5 minute read

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When is the Stock Market Closed?

In the age of next-day delivery and instant downloads, we’re all pretty used to getting what we want, exactly when we want it. However, when it comes to the historical institution that is the stock market, that’s not the case.

While a person can always access stock market data, the stock market itself has strict operating hours during a normal work week.

Generally, investors can buy and sell stocks in the market between 9:30am-4pm EST, but the exact schedule can vary based on time zone, market, and holiday season.

Additionally, the markets have built-in tools to extend trading, as well as to close it down at the drop of a hat. It’s all a part of how the stock market’s hours work.

Why Does the Stock Market Close Each Day?

A stock exchange is where a person can buy, sell, and trade stocks. Transactions on each exchange are organized and regulated by the group or institution that hosts the market. There are 17 exchanges in the world that are valued over $1 trillion, but for the sake of simplicity, we’ll focus on exchanges found in the US, like the New York Stock Exchange and NASDAQ. (Understanding the global stock market is worthy of its own article—and a topic many investors find helpful.)

The first stock exchange in the US opened in Philadelphia in 1790. Back then, all trades were done in person in hand to hand transactions. Of course, these stock brokers needed a rest every once and awhile, so it was only natural the market operated during normal business hours.

Exchanges started using computers for electronic trading as early as 1971. There were immediate advantages: Computers don’t require the breaks humans do, and can sometimes make larger batches of trades faster.

But while the way trades are done has changed—investors can trade stocks online vs handing a trade to another human in person—the traditional hours haven’t. For the most part, markets close around 4 or 5pm EST each weekday, and take a break on the weekends.

Of course, an investor can always look at their investment portfolio outside of trading hours, or request an exchange when the market is closed. It’s just that the buying or selling won’t happen until the market reopens for business.

Stock Market Operating Hours

With so many different stock markets across the globe, technically there’s always a market open—it just might not be one a trader is invested in. Most markets operate during their time zone’s business hours.

For a few brief periods, markets have tried to institute 24-hour stock trading, but the red tape surrounding the process made it a challenge, even with the technology in place. Additionally, having a small group of buyers and sellers in the later hours of the day lead to unexpected market volatility because there was less supply and demand overall.

In the US, the New York Stock Exchange observes “core trading hours” from 9:30am-4pm EST. As the market is on the east coast, investors on the west coast or other time zones might want to take note of the time zone shift.

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Which Holidays Does the Stock Market Observe?

Even with standard operating hours, stock markets will close their markets completely for certain holidays. The New York Stock Exchange recognizes the following holidays:

•   New Years Day
•   Martin Luther King, Jr. Day
•   Washington’s Birthday
•   Good Friday
•   Memorial Day
•   Independence Day
•   Labor Day
•   Thanksgiving Day
•   Christmas Day

Additionally, the stock exchange closes early (at 1pm EST) on:

•   The Friday after Thanksgiving
•   The day before Christmas (Christmas Eve)

Different stock exchanges in different countries might have different national holidays and operating schedules.

Other Times the Stock Market Closes or Is Halted

In addition to planned holidays, historically the stock market has closed trading in times of crisis or technical challenges.

At the beginning of the COVID-19 pandemic in early 2020, markets were halted multiple times due to unprecedented drops in the market. Called “trading curbs,” these are temporarily pauses, mandated by the Securities and Exchange Commission in 2012. Each level follows a different criteria:

•  Level 1: A 7% drop in the S&P 500 compared to closing the day before will trigger the market to be paused for at least 15 minutes.
•  Level 2: A 13% drop in the S&P 500 compared to closing the day before will trigger at least a 15 minute pause on the market.
•  Level 3: A 20% drop in the S&P 500 compared to closing the day before will trigger a premature close on trading for the rest of the day.

Trading curbs can occur for both a singular stock, as well as a whole market. It’s more common for the curb to be tripped on a single stock, but unprecedented events can spark a whole market pause. COVID-19 caused three market curbs in just over a week, and the terrorist attacks of 9/11 caused the NYSE to close for a week.

Additionally, the markets may close down to honor the death of a world figure, as was the case with Queen Victoria and Martin Luther King Jr.

The market has also closed unexpectedly due to technical glitches and cybersecurity threats. For example, in July 2015, the NYSE temporarily stopped trading because of a technical issue on the floor.

After-Hours Trading

The closing bell for the NYSE might ring promptly at 4pm ET, but there’s still “after-hours” trading to be done: it’s possible to buy, sell, and trade stocks between the hours of 4pm-8pm, EST. Electronic trading tools make it possible to conduct business after hours, but making moves at this time comes with its own set of risks.

Trading after hours can be more volatile than business-hours trading. With fewer active buyers and sellers at this time, investors could end up in over their heads. After hours trading wasn’t always open to individual investors, but now many services offer it to their users.

After-hours trading comes with its own set of risks, but it can also give an investor the opportunity to change their strategy in real time, as news on a company or industry might break after the markets have closed.

After-hours trading probably isn’t for a beginner investor, and if a person doesn’t need to buy, sell, or exchange a stock immediately, they might simply choose to wait until business hours the next day.

The Takeaway

The stock market typically operates on a 9:30 am to 4 pm ET schedule, with exceptions like designated holidays, weekends, and world events or other disruptive circumstances.

Because of time differences and varying holidays worldwide, it’s possible that there’s at least one market open at any given time globally—it just might not be the one an investor trades in.

When the market is closed, it’s still possible for investors to access stock data, and even engage in after-hours trading.

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