do stocks go down on mondays — what to know

Do stocks go down on Mondays?

Do stocks go down on Mondays? That question has driven decades of academic research and practical debate. The "Monday effect" or "weekend effect" refers to an observed tendency in some historical studies for stock returns on Mondays to be different — often lower — than returns on other trading days. This article unpacks the definition, history, evidence, explanations, modern developments, and practical takeaways so traders and investors can understand whether weekday timing should affect their decisions.

As a quick orientation: this page summarizes what researchers have found, why results differ across time and markets, and why most long‑term investors should not base strategy solely on day‑of‑week patterns. It also highlights how market structure changes — and tools such as Bitget’s market data and Bitget Wallet — affect the practical relevance of calendar anomalies.

Note: do stocks go down on mondays appears throughout this guide as the central question. You will find concise summaries, detailed studies, and actionable takeaways without investment advice.

Definition and scope

The terms "Monday effect" and "weekend effect" describe the same basic idea: stock returns on Mondays (or the first trading day after a weekend) differ systematically from returns on other weekdays. Historically that difference has often shown up as negative or lower average returns on Mondays compared with Fridays and the rest of the week.

Scope and boundaries:

• Primarily studied in equity markets — U.S. stocks, major indices, and many international equity markets.
• Results vary by market and time period; not all markets or subperiods display the effect.
• The phenomenon is calendar‑specific (day of week) and distinct from other calendar anomalies (e.g., January effect, pre‑holiday effect).
• Asset classes with continuous or different trading hours (cryptocurrencies, some bond markets, certain commodities) may not exhibit the same Monday vs Friday dichotomy.

For investors asking "do stocks go down on mondays?", the relevant population is usually daily returns for equities and indices rather than intraday volatility or after‑hours moves.

Historical background

Understanding the Monday/weekend effect requires looking back to the earliest systematic work.

Early empirical findings

One of the earliest landmark works was Frank Cross's 1973 study that documented systematic differences between Friday returns and the following Monday returns in U.S. equity markets. Cross and other early researchers observed that average returns on Mondays tended to be lower than those on Fridays and other weekdays, producing the label "Monday effect."

Key patterns observed in early research:

• Across mid‑20th century samples, many studies documented lower average Monday returns at both the index level and across broad cross sections of stocks.
• Some studies pointed to a negative return on Monday relative to Friday, effectively creating a small mean reversion from the Friday close to Monday open/close.
• The effect was reported across multiple exchanges and datasets but showed heterogeneity by time window and by firm characteristics (for example, smaller firms sometimes showed stronger patterns).

These early findings led to extensive follow‑up work trying to explain the pattern and test its robustness.

Subsequent research and structural breaks

Subsequent decades of research found the Monday/weekend effect is neither universal nor constant over time. Larger and later studies documented periods of weakening or disappearance.

• Several researchers reported that the weekend effect diminished in the 1980s and later periods, suggesting the anomaly may have been arbitraged away or affected by structural market changes.
• Some studies identified structural breaks around the mid‑1970s where the statistical signature of the weekend effect changed. For example, a line of research summarized by Arizona State University researchers argued that the classic weekend effect was most pronounced in earlier decades and was weaker or absent in later samples.

Taken together, the historical record shows an effect in many early samples but considerable variation in persistence and magnitude over time.

Empirical evidence and variability

Short answer to "do stocks go down on mondays?": sometimes — in historical samples and particular subperiods — but results are mixed and highly sample‑dependent.

Why empirical outcomes differ:

• Sample period: An effect visible in 1950–1975 data may vanish in 1990–2020 data.
• Market: The effect differs across countries, exchanges, and regulatory regimes.
• Unit of analysis: Index returns and individual stock returns can tell different stories; aggregate indices may dilute firm‑level patterns.
• Firm characteristics: Small‑cap stocks and low‑liquidity names historically showed stronger day‑of‑week variation in some studies.
• Methodology: Whether studies examine open‑to‑close, close‑to‑close, or overnight returns affects results.

Empirical summaries typically find that while some samples show statistically significant negative Monday returns, other samples show small positive Monday returns or no statistically meaningful difference. As a result, there is no uniform empirical consensus that "stocks always go down on Mondays."

Proposed explanations

Researchers and market practitioners have proposed several mechanisms to explain observed weekend or Monday effects. None is singularly conclusive across all samples, and multiple factors likely interact.

1. Timing of corporate bad news

• Some companies historically released negative news after the Friday close or over the weekend, producing a drop by Monday. The logic: managers prefer to avoid immediate market reaction or want a stable environment to announce difficult news.

1. Weekend sentiment and investor psychology

• Retail and institutional sentiment may shift over weekends, with negative attitudes accumulating and translating into selling pressure on Monday.

1. Short‑seller behavior and position timing

• Some papers argue that short sellers concentrate activity around Mondays, increasing selling pressure and downward returns.

1. Liquidity and institutional scheduling

• Differences in liquidity between Monday and other weekdays (for example, comparatively lower order flow or wider bid‑ask spreads) can amplify price moves.

1. Macro news timing and Monday auctions

• Important macro data released Monday morning or news accumulation over the weekend can produce sharper Monday reactions compared with intraday news flow.

1. Trading costs and market microstructure

• Historically higher transaction costs, discrete settlement cycles, and less efficient after‑hours information distribution could have produced calendar patterns that later diminished as markets modernized.

Each proposed explanation has empirical support in certain samples; yet none perfectly explains all variations across time and markets.

Why the effect may have changed (modern market factors)

Several structural market changes since the 1970s have likely reduced simple calendar anomalies, including the Monday/weekend effect:

• Electronic trading and algorithmic market making have increased the speed and continuity of price discovery.
• Extended and after‑hours trading sessions (and wider dissemination of corporate news) reduce the information gap between Friday close and Monday open.
• Faster news dissemination (internet, social media, 24/7 news cycles) compresses information arrival and reaction times.
• Lower transaction costs and narrower bid‑ask spreads reduce the friction that once made calendar arbitrage costly.
• Widespread quantitative and systematic strategies seek to identify and arbitrage calendar effects, reducing their persistence.

Given these changes, many calendar anomalies that were visible in earlier decades have weakened or disappeared in recent samples, making the Monday effect less robust in modern markets.

Statistical significance vs economic significance

When evaluating "do stocks go down on mondays?" it's important to distinguish statistical detectability from economic exploitability.

• Statistical significance: Large samples can detect very small mean differences that are statistically significant but economically trivial.
• Economic significance: Even if an average Monday return is, say, −0.05%, that magnitude may be smaller than typical trading costs, slippage, and tax considerations, making profitable exploitation difficult.

Practical constraints:

• Transaction costs and bid‑ask spreads can wipe out small calendar premiums.
• Market impact for larger positions further increases trading costs.
• Time horizon matters: long‑term investors are unlikely to materially improve outcomes by avoiding or favoring a single weekday.

Therefore, while researchers sometimes find statistically significant Monday effects in historical data, those findings often translate to negligible economic opportunities for most investors after real‑world costs.

Methodological issues and criticisms

Research into calendar anomalies must navigate several common pitfalls that can produce misleading inferences.

• Data‑mining and multiple testing: With many possible calendar and cross‑sectional tests, some statistically significant patterns can occur by chance.
• Survivorship bias: Using datasets that exclude delisted or failed firms can overstate effects.
• Sample selection and period choices: Starting and ending dates, especially around structural breaks, can materially change results.
• Regime changes: Changes in market microstructure (decimalization, electronic trading) create structural breaks that undermine out‑of‑sample inference.
• Definition sensitivity: Whether returns are measured open‑to‑close, close‑to‑close, overnight, or with adjustments for dividends and corporate actions matters.

Robust research needs to correct for these biases and test across multiple samples, subgroups, and return definitions.

Variations and related anomalies

The Monday/weekend effect sits among other calendar phenomena that researchers study:

• Reverse weekend effect: Some markets or subperiods show better Monday performance or weaker Friday returns; not all patterns are negative on Mondays.
• Day‑of‑week effects generally: Tuesday, Wednesday, and Friday have been subjects of other small anomalies in some studies.
• January effect: Small stocks historically showing higher returns in January is another calendar anomaly with its own mixed persistence.
• Pre‑holiday and post‑holiday effects: Stocks sometimes perform differently around market holidays.

Heterogeneity:

• Small‑cap vs large‑cap: Weekend patterns are often stronger in smaller, less liquid stocks.
• International differences: Different regulatory, institutional, and cultural environments produce diverse calendar signatures across countries.

Understanding these variations helps explain why a single blanket answer to "do stocks go down on mondays?" is unlikely to hold across all contexts.

Implications for investors and traders

What should investors and traders do with the idea that "do stocks go down on mondays?" Here are practical considerations.

For long‑term investors:

• Day‑of‑week patterns are unlikely to meaningfully change long‑term returns after costs; prioritize diversification, asset allocation, and low fees.
• Avoid frequent trading solely to exploit small calendar anomalies because transaction costs and taxes can erode gains.

For traders and short‑term strategies:

• Day traders can monitor intraday liquidity and volatility patterns, which may differ by weekday in specific instruments.
• Any strategy that uses day‑of‑week signals should be backtested robustly across multiple periods and stress‑tested for transaction costs and market impact.

Risk management and realism:

• Beware of overfitting: patterns may disappear in live trading even if backtests showed historical significance.
• Use robust statistical methods, avoid a posteriori cherry‑picking, and include realistic cost assumptions.

Tip: If you need up‑to‑date intraday market data or to test strategies, Bitget provides market data and trading tools that can be used for research and execution. For custody and secure management of crypto assets, consider Bitget Wallet. (This is a platform note, not investment advice.)

Relevance to other asset classes (brief)

Not all asset classes share the Monday/weekend dichotomy:

• Cryptocurrencies: Trade 24/7 and do not have an exchange gap over the weekend in the same way. Calendar effects tied to weekday closings are therefore less directly comparable for crypto; if you ask "do stocks go down on mondays?" you must treat crypto separately.
• Bonds and commodities: These markets have different trading hours and participant structures; calendar anomalies depend on their unique microstructure and scheduled data releases.

Consequently, cross‑asset comparisons require careful treatment of trading hours, settlement conventions, and where information is revealed.

Practical guidance and takeaways

• Short answer: historical evidence shows occasional lower average returns on Mondays in some samples, but the effect is inconsistent, often small, and sometimes disappears.
• Do not base a long‑term portfolio strategy solely on the idea that do stocks go down on mondays. Focus instead on asset allocation, fees, and risk management.
• If you plan to trade based on day‑of‑week signals, run robust out‑of‑sample tests, include transaction costs, and monitor for structural changes.
• Use modern tools for testing and execution: Bitget’s market data and trading features can support research and strategy implementation. For secure asset custody in crypto environments, Bitget Wallet is recommended.

Further action: explore historical intraday datasets, backtest strategies using multiple return definitions (open‑to‑close, close‑to‑next‑close, overnight), and assess costs before deploying capital.

References and further reading

• Frank Cross, “The Behavior of Stock Prices on Fridays and Mondays” (1973) — original study documenting weekday differences.
• Investopedia, “What Is the Monday Effect on Stock Market Prices?” — accessible explanation of the weekend effect and interpretations.
• The Motley Fool, “What Is the Monday Effect?” — practical commentary for retail investors.
• Arizona State University research summarizing evidence of structural breaks in the weekend effect and arguing the effect weakened after the mid‑1970s.

As of 1973, Frank Cross reported systematic Friday–Monday differences in U.S. equity returns; later literature documented that the pattern’s strength varied over time and across markets. Readers should consult the cited academic works and accessible summaries for period‑specific empirical evidence.

Further reading suggestions are listed so you can review the original studies and accessible summaries before applying any calendar‑based trading rules.

Reporting context and data notes

• As of 1973, Frank Cross reported the earliest systematic documentation of the Friday–Monday pattern in stock prices (Cross, 1973).
• As of the mid‑1970s, several researchers pointed to structural shifts that changed calendar signatures in subsequent decades.

When examining statistical claims about calendar effects, always check the sample period, the return definition used, whether delisted firms were included, and whether transaction costs were incorporated.

Final thoughts and next steps

If your goal is to answer the question "do stocks go down on mondays?" precisely: the best short answer is that historical evidence shows occasional negative Monday tendencies in certain samples, but the effect is not universal, has weakened in many markets over time, and is often too small to exploit profitably once costs are considered.

Further exploration:

• Test the effect on a specific index or portfolio across multiple decades and include realistic trading costs.
• Combine day‑of‑week signals with other robust signals rather than relying on a single calendar pattern.
• Use Bitget’s market data for analysis and Bitget Wallet for secure crypto custody if you are researching cross‑asset behavior.

To learn more about market microstructure, calendar anomalies, and how to research trading ideas responsibly, explore Bitget’s educational resources and tools.

References (selected): Frank Cross (1973); Investopedia; The Motley Fool; Arizona State University research on weekend effect structural breaks.