Will Thanksgiving Week Keep the Market Rally Alive? US Stocks Enter Holiday Stretch with Strong 2025 Gains

Even while investor optimism is clouded by concerns about the AI bubble and Fed uncertainty, the S&P 500 and Nasdaq enter a shortened Thanksgiving week with strong year-to-date returns.

Thanksgiving week in the US stock market: The S&P 500 is up 12.3% in 2025 through November 21, and the Nasdaq Composite is up 15.3%, with total returns somewhat higher at 13.6% and 16%. The US stock market is starting Thanksgiving week with a truncated holiday schedule and a great year well underway.

On Thursday, November 27, markets will close early at 1 p.m. ET on Black Friday. Investors are pondering whether Thanksgiving week normally brings gains, especially as fears about a possible AI bubble and uncertainties surrounding a December Federal Reserve rate decrease continue to weigh on the mood.

Thanksgiving week frequently outperforms its proportionate share of annual returns, according to a survey of the previous ten years. Thanksgiving week exceeded the Nasdaq's 28.6% rise and the S&P 500's 23.3% gain in 2024. A stronger-than-expected Thanksgiving stretch in 2023 mirrored the Nasdaq's 43.4% increase and the S&P 500's 24.2% year gain.

Despite supply-chain disruptions, China lockdowns, rising inflation, Fed tightening, and geopolitical shocks causing both indices to register sharp losses of 19.4% and 33.1% in 2022, Thanksgiving week nevertheless produced a big upside surprise.

Even while the S&P 500 and Nasdaq saw increases of 26.9% and 21.4%, respectively, in 2021, Thanksgiving week fell short as late-year volatility hinted at the subsequent decline in early 2022. Thanksgiving week exceeded expectations once more in 2020 as the S&P 500 increased 16.3% and the Nasdaq climbed 43.6% due to pandemic-driven tech demand.

Except for 2018, when both major indices finished the year down and the holiday period underperformed due to worries about a slowing economy, Fed rate hikes, and U.S.-China trade tensions, the pattern persisted in 2019, 2017, 2016, and 2015. Even in stormy years, seasonal momentum frequently exceeds broader market fears, as evidenced by the ten-year history of relative strength around Thanksgiving week. Thanksgiving week has arrived, and the calendar for US markets will be modified.

On Thursday, November 27, markets close, and on Black Friday, they close early at 1 p.m. As Investors are heading into the holiday with mixed emotions. Concerns about the AI bubble are mounting. It's possible that the Fed won't lower interest rates in December. However, stocks are still up for the year.