Does the S&P 500 always decline on Thursdays? Wall Street warns that the midweek rebound may be unsustainable

Ask AI · How does Trump’s policy timing affect the cyclical fluctuations of the U.S. stock market?

Cailian Press, April 2 (Editor: Ma Lan) The conflict in the Middle East has lasted five weeks, and chaotic trading in global markets has also persisted for five weeks. Some analysts on Wall Street point out that the U.S. stock market has shown a somewhat predictable pattern during this period, namely strong starts at the beginning of each week, sideways consolidation in the middle of the week, and then sharp declines on Thursday and Friday.

European and emerging market stock markets also exhibit similar patterns, but the cyclical nature of the S&P 500 index is particularly pronounced. Since the outbreak of the U.S.-Iran conflict, the index has gained cumulatively in the first three days of each trading week, then sharply declined on Thursday and Friday, with the past five weeks seeing a 9% decline on Thursdays and Fridays.

The red box shows the weekly S&P 500 index movements on Thursdays and Fridays.

Considering that U.S. President Trump likes to release some key policies during weekends when the market is not trading, many investors tend to reduce their stock holdings over the weekend.

Joe Gilbert, portfolio manager at Integrity Asset Management, told the media that entering the weekend with unknown risks is unsettling, and reducing risk before the weekend is more important than holding positions.

Steve Sosnick, Chief Strategist at Interactive Brokers, said that optimistic sentiment is usually gradually replaced by risk-averse sentiment during the week. He believes that the downward trend in U.S. stocks will continue until the economy returns to normal.

Wrong optimistic expectations

This week has some special circumstances. The U.S. stock market was closed on Good Friday for Easter, meaning there are three non-trading days this week. Over the past two weeks, Trump has repeatedly shown willingness to negotiate with Iran, significantly boosting market optimism, with the S&P index rising more than 3% in the first three days of this week.

However, on Wednesday night, Trump promised in a televised speech that he would continue bombing Iran in the coming weeks, causing the market’s optimism to dissipate rapidly. After-hours, S&P 500 futures fell 1%, and oil prices surged, indicating that U.S. stocks might decline again on Thursday.

Benjamin Picton, an analyst at Dutch bank ABN AMRO, pointed out that the market’s optimistic interest over the past 24 hours is likely mistaken. Trump’s underlying message is that NATO and Gulf countries must participate in the war to reopen the Strait of Hormuz, or else they will have to bear the consequences of U.S. troop withdrawals on the global economy.

Asian markets have already felt the new storm brewing. On Thursday, the Nikkei 225 index closed down 2.38%, and the KOSPI index in South Korea fell 4.47%. Meanwhile, spot gold prices quickly declined, dropping from Wednesday’s close of $4,783 per ounce to below $4,600 per ounce.

Goldman Sachs Delta-One head Rich Privorotsky warned in a previous report that the current sentiment and positioning in global stock markets have turned extremely pessimistic. Although there are technical conditions for a short-term rebound, macroeconomic and earnings fundamentals are still insufficient to support investors’ confidence in going long.

(Cailian Press, Ma Lan)