We analyzed the average daily returns of the stock market around Labor Day over the past 72 years. The results may surprise you. Here’s what we found. 

As we near the end of summer, you may be curious how US stocks have historically performed around Labor Day. We calculated the historical performance of the benchmark S&P 500 index during the three trading days before and three trading days after the Labor Day holiday.

Our analysis is based on daily closing prices from 1950 to 2021 (72 years). We found the average daily return for all trading days during this time frame was a minuscule loss of just -0.002%. That’s right, it's barely noticeable.

What about more recent Labor Day stock market performance? We drilled down to the past five years of S&P 500 performance around Labor Day to see how results compare to the longer-term.

Here are the average daily returns from 2017-2021 (three days before and three days after Labor Day):

• 2017: +0.13%.
• 2018: -0.11%.
• 2019: +0.62%.
• 2020: -0.89%.
• 2021: -0.11%.

Notable Labor Day Stock Market Trends

The average daily return of the past 72 years was basically nil, but we noticed a tendency for stocks to rise slightly on the Friday before Labor Day weekend. There were no significantly unusual returns for the other five trading days around Labor Day.

Unsurprisingly, we also noticed that volatility is relatively high on the first trading day after Labor Day. The first trading session after Labor Day unofficially marks the end of the summer doldrums—typically when institutional volume starts returning to the markets.

Conclusion

Based on our analysis, we see no reason to base your trading or investment decisions solely on the upcoming Labor Day holiday. Knowing the seasonal and holiday stock market trends can be interesting, but is seldom significant over the long-term.

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