Is the stock market closed on Monday December 26? Holidays are a long-standing tradition in the financial world. However, with Christmas Eve and Christmas falling on a weekend this year, many investors may be confused about whether or not the December holiday will have an effect on the stock market.
Federal holidays in the United States have existed for many years. In fact, they date back over 150 years in the United States. In 1870, legislators established federally observed holidays during which all federal institutions are closed. Originally recognized holidays were only Christmas Day, Thanksgiving, New Year’s Day and July 4th. Since then, however, the number of federally recognized holidays has increased to 12 days, with Juneteenth being added to the list most recently.
There is no legal requirement for the exchange to close on federal holidays, as the market is not a federal institution. However, like banks, schools, and many other non-federal institutions, the exchange closes anyway as a courtesy.
Thus, the two largest US stock exchanges have historically closed on Christmas Day. However, things can be a bit confusing for investors and traders this year, with Christmas coming on a Sunday. The stock market is always closed for trading on Saturdays and Sundays, so obviously it would be closed on Sunday, December 25, even though it is a federal holiday. Accordingly, on the occasion of Christmas Day, the market will also be closed on Monday 26 December. This potentially confusing calendar is just one of the many oddities the stock market faces during the winter holiday season.
As of the date of publication, Brenden Rearick has not held (directly or indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.