Memorial Day has been the unofficial first bookend to summer for decades. Prior to 1971, the date floated around a bit as it was traditionally the last day of May. Since 1971, it’s been formally changed to the last Monday in May. Originally, it was known as “Decoration Day,” as a formal date to decorate graves of the fallen in the years after the Civil War, but over the years the name shifted to Memorial Day.
For stock market investors, the shortened Memorial Day week has historically been positive.
As shown in the chart below, average and median returns are higher for Memorial Day week than all weeks since 1971, and stocks are more likely than average to end the week up. Since 1971, the S&P 500’s average return during the four-day week of Memorial Day has been an advance of 0.54% (median: 0.61%) with positive returns 62% of the time. That’s quite a bit higher than the average return of 0.16% (median: 0.27%) for all weeks since 1971.