Wall Street is about to lose sleep! Countdown to the U.S. stock market's "23/5" trading modelcan global capital relay strengthen the path of a long bull market?

Title context: Wall Street is about to lose sleep! Countdown to the U.S. stock market's "23/5" trading modelcan global capital relay strengthen the path of a long bull market? Text: For decades, U.S. stock exchanges have pressed pause every night, closing the market for several hours. But after December of this year, as the U.S. stock market moves toward an around-the-clock 23-hour trading model, the exchange servers' trading lights will stay on longer. It is understood that Nasdaq, NYSE Arca, 24X National Exchange, and Cboe EDGX have drawn up plans to add an overnight trading session from 9 p.m. to 4 a.m. New York time, on top of the existing regular trading session and pre-market and post-market sessions. This expansion, scheduled to take effect on December 6, is aimed at meeting growing demand from overseas investors while competing with the crypto asset market and prediction marketswhose 24/7, never-ending trading models have arguably upended the traditional perception of Wall Street trading hours. Overnight trading has existed for years, mainly through alternative trading systems, but accounts for a very small share of overall trading activity. Data released at a U.S. Securities and Exchange Commission roundtable last week showed that overnight trading accounted for about 1% of total stock volume in the second quarter. Although it is far smaller than daytime trading by any measure, overnight trading is growing rapidly, with volume surging 358% year over year. The upcoming 23/5 trading model has sparked debate over how extended trading hours will affect global market participants. Supporters argue that the move will remove time-zone barriers and make it easier for overseas traders to access the U.S. market. Skeptics argue that lower liquidity and wider bid-ask spreads will amplify trading risks. The chart above shows the share of volume by different types of accounts. Source: U.S. Securities and Exchange Commission, client and account data. Wall Street Without Sleep: Overnight Stock Trading Is Coming David Easthope, a senior equity market analyst at Crisil Coalition Greenwich, said institutional investors' main concern is "market quality during extended trading hours," while operational and staffing issues are not necessarily their top priority. A survey the firm conducted last year of buy-side equity traders showed that market participants are not enthusiastic about trading stocks around the clock. Because there are fewer active participants outside regular trading hours, investors may face lower volume, thinner liquidity, and wider bid-ask spreads. The survey showed this could bring additional operational risk and complexity, and even affect traders' own physical and mental health. Since the survey was conducted in the second half of 2025, attitudes in this group have improved somewhat. Easthope said people now "feel more that this change is inevitable," especially as regulators continue to push related reforms. For years, the concept of overnight trading has been welcomed by retail investors and trading platforms. Brian Hyndman, CEO of Blue Ocean Technologies, said that once the new arrangement takes effect in December, "the market participants who have consistently taken part will be there and ready." The company is one of the alternative trading system operators currently providing overnight trading services. "But I still think there is a part of the industry that has not yet participated, and that is really the buy-side institutions and investment banks." He added, "They have been hesitant to get involved." Key market infrastructure providers are also preparing for the shift. The main institution responsible for clearing U.S. stock tradesthe Depository Trust & Clearing Corporationswitched to a 245 model in June, operating from 8 p.m. New York time on Sunday to 8 p.m. Friday. The Securities Information Processor (SIP), responsible for collecting and distributing quotes and trade data, has also received regulatory approval to extend its operating hours to support overnight trading. Joseph Saluzzi, partner and co-head of equity trading at Themis Trading, said supporters of the shift may be betting that once the infrastructure is in place, institutional demand will follow. However, he is skeptical of the shift. "Institutional investors have no interest in trading in a market that is low-liquidity, wide-spread, and very likely highly volatile." He said this while adding that combined exchange pre-market and post-market trading volume accounts for only about 10% of overall trading activity. "In fact, if you wanted to make that argument, you could just as easily say the market's trading hours are already too long, not too short." For now, institutional investors remain on the sidelines. Jeff O'Connor, head of market structure at Liquidnet, said that if the December 6 adjustment improves price discovery during overnight hours, trading costs will eventually fall, helping institutional asset managers capture excess returns at night. Overseas investors are naturally especially active during overnight trading hours. SEC data showed that in the second quarter, overseas investors accounted for 37% of overnight volume, compared with only 7% for institutional accounts. This trading activity is also highly concentrated. In August, an average of just 15 stocks accounted for half of total overnight volume, often including shares of companies incorporated in mainland China and Hong Kong with stock prices below $1. By contrast, it took 256 stocks to account for half of volume during regular trading hours. Currently, the core trading session for Nasdaq and the NYSE on each of the five weekdays runs from 9:30 a.m. to 4 p.m. Eastern Time. In addition, both exchanges offer pre-market and post-market sessions that allow limited types of trading: pre-market trading begins as early as 4 a.m., while post-market trading runs from 4 p.m. to 8 p.m. After trading hours are extended in December, the exchanges will still pause for one hour from 8 p.m. to 9 p.m. for system maintenance and trade processing. What does the 23/5 trading model mean for the trajectory of the long U.S. bull market and for market volatility? The U.S. stock market may soon move from a "New York trading day" to a near-around-the-clock market covering global time zones. Nasdaq, NYSE Arca, 24X, and Cboe EDGX are advancing 23/5 trading around December 6, 2026, adding an overnight session from 9 p.m. to 4 a.m. New York time while retaining a maintenance window from 8 p.m. to 9 p.m. The commercial driving force behind this comes from overseas investor demand and competition from continuous trading in crypto assets and prediction markets: second-quarter overnight volume surged 358% year over year, but still accounted for only about 1% of total U.S. stock volume. Overseas investors and institutional accounts contributed 37% and 7% of overnight volume, respectively, showing that global demand is growing while institutional participation remains limited. The latest official progress shows that this reform has entered the system preparation stage: Nasdaq announced six user acceptance testing arrangements on September 28 and plans to launch pre-production testing on November 1; DTCC's NSCC extended to 245 clearing services in June, and the consolidated tape processor SIP has also been approved to extend operating hours, with plans to align with the December launch. The core of Wall Street analysts' debate over this 23/5 trading model is whether longer trading hours can bring sufficient depth of liquidity and reliable price discovery. 23/5 means five trading days a week and 23 tradable hours a day, while the core trading session is still retained. In essence, it expands the time window for cross-time-zone capital access and information pricing. Exchanges, overnight trading platforms, and retail investors overseas, especially in Asia, value trading convenience, while institutional investors focus more on bid-ask spreads, order depth, and execution costs for large trades. Overnight trading currently has both clear cross-time-zone demand and the problems of highly concentrated volume and limited institutional participation. From the perspective of market microstructure, when the order book is thin, buy and sell orders of the same size more easily move prices, and market makers may also widen bid-ask spreads to compensate for inventory and hedging risk. Therefore, there is still a liquidity gap to fill between "being able to place an order at any time" and "being able to execute at a reasonable cost at any time." Based on market microstructure reasoning, if in the early stage of the reform orders are dispersed over a longer period while market-making capital does not increase in tandem, the thinner overnight order book could amplify the price impact and temporary deviations of individual trades; as institutional participation, unified quotes, and arbitrage mechanisms improve, some information shocks originally concentrated and released at the next day's open may also be gradually digested in advance, so opening gaps may decrease, but total intraday volatility will not necessarily fall. For the long U.S. bull market, 23/5 is expected to reduce friction for overseas investors, expand the potential capital pool, and lower the liquidity premium after liquidity improves; its role is mainly reflected in market efficiency and valuation support. Long-term gains are still determined jointly by corporate free cash flow, the full realization of AI technology-driven productivity transformation, interest rate expectations/the U.S. Treasury yield curve, and the equity risk premium. Extending the trading clock can broaden the channel for capital to enter U.S. stocks, but sustained earnings growth determines how long a bull market that channel can carry. Wall Street financial giant JPMorgan has begun to follow Goldman Sachs, Jefferies, Yardeni Research, and other giants in turning bullish on U.S. tech stocks, which has also to some extent pushed institutional and retail investors to focus more on buy-the-dip strategies during this week's U.S. stock market pullback. JPMorgan believes that the overall valuation adjustment of the Magnificent Seven, the seven largest U.S. tech giants that carry heavy weight in the U.S. stock market, may be largely complete, and earnings growth is expected to once again become the main force supporting share prices; JPMorgan said the ratio of the Magnificent Seven's forward 12-month P/E to that of the broader market has fallen to about one standard deviation below the historical median, at a ten-year low. Wall Street financial giant Jefferies said recently that, driven by the twin engines of the AI investment boom and AI-related corporate earnings rising above expectations, the S&P 500 is expected to surge to 8,000 by the end of 2026 and further reach 9,000 in 2027. Jefferies' core logic is clear and powerful: in a cycle where AI-driven earnings growth exceeds the historical average by more than twofold, it is dangerous to fight the earnings trend. Jefferies' base-case forecast of 8,000 for the S&P 500 in 2026 is based on earnings per share (EPS) reaching $373 (up 35% year over year, far above the market consensus of 29%) and a P/E ratio of 21.5 times.