When former President George H.W. Bush is eulogized today at the National Cathedral in Washington, D.C., Wall Street will take a break. The New York Stock Exchange announced that it would cease trading on Wednesday to mark the national day of mourning.
"We remember President Bush admiringly as a veteran who fought totalitarianism, a statesman who advocated for freedom, a leader who served his country, and an unabashedly dedicated family man," Stacey Cunningham, NYSE Group President, said in a statement issued on Dec. 1. “He will be remembered for his decades of service to the nation and the world, and it is appropriate that the New York Stock Exchange closes on Wednesday, the National Day of Mourning, to honor President Bush’s enduring legacy.”
This is not the first time that the markets have closed to honor a passing of a world leader. In fact, the tradition of shutting down the market to mourn the passing of a president — or a British monarch — dates back more than a century. In 1885, the stock exchange closed for a day for the funeral of former President Ulysses S. Grant. The stock market also closed for a day for the funerals of other dignitaries, including Queen Victoria, former President John F. Kennedy and Martin Luther King Jr., according to the Wall Street Journal.
The NYSE, NYSE American, NYSE National, NYSE Arca, and the Chicago Stock Exchange will be closed on Wednesday, December 5, 2018 in observance of the National Day of Mourning for President George H. W. Bushhttps://t.co/zeN0OAwxHS pic.twitter.com/7cP0f1LEJf
— NYSE (@NYSE) December 1, 2018
When former President Gerald R. Ford passed away at the end of 2006, the market faced a dilemma as to when to close down for a day. Wall Street was worried that it would have to cease trading on Friday Dec. 29, the last day of trading that year.
“Historically, the market closes in a national day of mourning when a president dies. But you can't close on Friday because it's the last day of the year,” business analyst David Johnson explained to Marketplace at the time. “Everybody's doing their last-minute 401(k) contributions and selling for tax losses and stuff like that. So, that's out of the question.”
The stock exchange ended up being closed on Tuesday Jan. 2. It was closed for four consecutive days — something that rarely happens.
It’s not just heads of state and civil rights leaders that have been honored with a pause in trading on Wall Street. After famed financier J.P. Morgan died, the stock exchange shut down for two hours from 10 am till noon on April 14, 1913, the day of his funeral.
But these kind of closings are rare and far between. Besides national days of mourning, the stock exchange has shut down for terrorist attacks, the Apollo II moon landing, and of course bad weather, such as blizzards and hurricanes, according to Mother Jones. Hurricane Sandy closed down the New York Stock Exchange for two whole days in the fall of 2012.
And while trading will continue on stock exchanges in other parts of the world when the NYSE is closed for the day, the rest of the world tends to be kind of quiet. People buy and sells stock based on all kinds of information — public or private, local or international — and they learn a lot based on how other people trade. When trading is not happening in one place, it can affect trading in other places.
The markets will have to catch up a day later, however. And so even if the markets are fairly quiet on Wednesday, there is a chance of volatility come Thursday this week.