War sparks "Weekend Fear" in the US stock market! The S&P 500 falls into a "Black Thursday" scheduled crash curse

Zhitong Finance APP learned that the Middle East war has entered its fifth week, and the global economy has continued to be hit. The U.S. stock market has already formed a predictable pattern: a strong rally at the start of each week, narrow trading-range volatility in the middle of the week, and then, like a wound-up spring, every Thursday and Friday it suddenly crashes and plunges sharply.

European and emerging-market stock markets, and even some U.S. Treasuries, have shown similar patterns to varying degrees. But this pattern is especially pronounced in the S&P 500 index. Since the outbreak of the Iran war, the index has recorded gains over the first three trading days of each week, but it has fallen a combined 9% on Thursday and Friday.

Experts say the logic behind it is not complicated. There are two days on the weekend (or three days if there is a holiday) when trading is not possible, and during those two days, there may be many further events that disrupt the global economy—especially considering that U.S. President Donald Trump has a habit of taking major actions while the market is closed. As a result, many investors tend to reduce their equity positions as the weekend approaches.

Joe Gilbert, a portfolio manager at Integrity Asset Management, said, “It’s an unsettling idea to enter the trading window with unknowable risks.” “Compared with holding positions, it has become easier to lower risk before the weekend.”

Bullish sentiment at the start of this week was particularly strong, driven by optimistic expectations that Trump is eager to extricate himself from the conflict he initiated. The S&P 500 at one point rose more than 3%. But late on Wednesday, in a televised address, Trump pledged that he would continue to bomb Iran in the coming weeks, to “send them back to the stone age they belong to.” The remark quickly extinguished market optimism. S&P 500 futures fell 1%, oil prices surged, signaling that U.S. stocks would face renewed pressure on Thursday.

Steve Sosnick, chief strategist at Interactive Brokers, said that optimistic sentiment is usually replaced by risk-averse sentiment as the “trading week progresses.”

Trump’s nationwide speech continued the familiar playbook used since the U.S. began bombing: repeatedly wavering between claims that victory is imminent and threats escalating dramatically against Iran. Earlier that day, he also used similar wording, saying he would continue to “bomb Iran back into oblivion” until the key corridor for Middle East oil exports—the Strait of Hormuz—reopens. Iranian officials were unmoved by the threat, saying they would not be intimidated by Trump’s “absurd performance.”

Sosnick believes oil prices are still at high levels and there is no sign of a ceasefire in the near term, so the consistency of this week’s early gains is no higher than other early-week gains. “I think the downtrend will continue,” he said, “until we can see unmistakable signs of some return to normal.”