(Bloomberg) -- Investors can rely on one crucial day of the week to deliver strong dip-buying opportunities for the S&P 500 Index thus far in 2025: Wednesdays.
Traders lately have been selling first and asking questions later to lock in gains ahead of the weekend as stocks zig-zag on President Donald Trump’s tariff plans. That’s why Wednesdays this year have racked up gains that — if annualized — would reach 127%, according to data compiled by Ryan Detrick, chief market strategist at Carson Group. The weeks generally start and end badly, with Mondays and Fridays delivering annualized losses that exceed 40%.
“To see jitters ahead of the weekend on Fridays is not normally a sign of a healthy market,” said Detrick, a widely-followed stock bull. “It shows that there is indecision among investors, given there’s so much news from tariffs to DeepSeek coming over the weekends now.”
While there have been just a handful of observations so far in 2025, it marks an about-face from the stock-market rally in 2023 and 2024, when traders typically piled into equities at the start of the week.
But this year, traders are often capitalizing on potential market fluctuations mid-week due to earnings reactions or increased trading activity that may occur as investors react to news and developments out of Washington from earlier in the week, potentially creating opportunities to buy dips on other days.
For one thing, Wednesdays have a strong historical track record of delivering dip-buying opportunities for the S&P 500. From 1980 to February 2024, the stock market generated a positive gain on 53% of trading sessions, according to data compiled by Jacob Manoukian, US head of investment strategy at JPMorgan Private Bank & Wealth Management. Through 2023, Wednesday was the day of the week with the highest share of positive days at 55%.
It’s evident that traders have been using Friday’s session to take profits and consolidate positions ahead of what could be an eventful weekend of trade developments, with the S&P 500 closing lower in four of the past six Fridays. “The market hates tariffs,” said Thomas Thornton, founder of Hedge Fund Telemetry, who is shorting the S&P 500 and the Nasdaq 100 Index. “It is getting harder and trigger fingers to sell are quicker.”
In 2025, the SPDR S&P 500 ETF Trust, or SPY, the largest exchange-traded fund tracking the benchmark equities index, has dropped by 17 basis points on average on Fridays, on pace for that day’s worst annual performance since 2001, according to data compiled by Athanasios Psarofagis, an ETF analyst at Bloomberg Intelligence. The average gap from Friday’s close to Monday’s open for the SPY is a whopping 65 basis points thus far in 2025, far greater than what has historically been seen in years past, he said.
While Wednesday might show a pattern for dip buying, it’s not a guaranteed winning strategy. Market history suggests that day-of-the week investing is unlikely to be a reliable over the long haul for portfolio gains.
Of course, institutional investors have typically been selling this year’s rallies while retail investors have been buying the dips. Though hedge funds were large buyers of US stocks last week following five straight weeks of net selling, according to Goldman Sachs Group Inc.’s prime brokerage report for the week ended on Feb. 7.
In general this year, Tuesdays and Fridays have seen more dip-buying among retail investors, with Monday typically seeing the least, according to an analysis by Emma Wu, JPMorgan Chase & Co.’s global quantitative and derivatives strategist. Retail activities slowed this week as they net bought $832 million on Monday — the lowest level since Jan. 13, she said.
“We’ve had a few rough Monday’s, one with DeepSeek, one with tariff worries, so it could be that some clients are just too nervous on a number of issues,” said Jim Worden, chief investment officer of Wealth Consulting Group. “We believe the ‘buy the dip’ narrative is real with 401k participation. For more systematic traders, they probably just don’t want to stay long with perceived uncertainty.”
