New Rules of the US Stock Market Under the War: S&P 500 Index Plunges Every Thursday.

The Middle East conflict has been ongoing for five weeks now, causing not only a huge impact on the global economy but also creating a predictable pattern in the US stock market: starting the week with strong performance, consolidating mid-week, and then experiencing sharp declines on Thursdays and Fridays. A similar trend is more or less playing out in European stocks, emerging markets, and even some US bonds, but it is particularly evident in the S&P 500 index. Since the outbreak of the Iran war, this index has seen cumulative gains in the first three days of the week, but total declines of 9% on Thursdays and Fridays since the start of the war. Experts say the reason is simple. The weekend means investors cannot trade for two days, or in the case of this holiday weekend, three days. The situation in the war could change drastically in those two days, further affecting the global economy, and US President Donald Trump often makes big moves in the market during market closures. Therefore, many investors tend to reduce their holdings towards the end of the week. Joe Gilbert, portfolio manager of Integrity Asset Management, said that blindly trading in the presence of unknown risks is a worrisome idea, and reducing risk before the weekend is much easier than maintaining positions.