The Stock Market Is Closed Today. It’s Dropping Anyway.

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The stock market is dropping even though it’s closed for the Fourth of July in the United States.

That’s not as strange as it sounds. Stock markets are interconnected so even when one is closed futures often trade in overseas markets, giving a sense of where the market would be trading if it were open.

That’s the case Monday, when the major markets are closed, but the futures on the major indexes are on the move.

S&P 500
futures have fallen 0.5%, while

Dow Jones Industrial Average
futures have declined 0.4%, and

Nasdaq Composite
futures have dropped 0.6%.

That’s in contrast to much of the trading happening overseas, where the U.K.’s FTSE 100 has gained 1.1%, France’s CAC 40 has advanced 0.5%, and the Europe Stoxx 600 has risen 0.6%. Only German’s DAX, down 0.3%, is lower on the day. In Asia, China’s Shanghai Composite has advanced 0.5%, while Japan’s Nikkei has risen 0.8%.

Still, Societe Generale’s Kit Juckes doesn’t recommend reading too much into the action. “The sun’s shining, July 4th celebrations are starting in the U.S., markets are more cheerful, and we will learn little today,” he writes.

Recession fears are likely to dominate the markets going forward. The S&P 500 started the month off with a big gain even though the economic data, including the ISM Manufacturing Survey and construction spending, were bad enough to knock second-quarter GDP down 2.1%, according to Atlanta Fed’s GDPNow tool, and on track for a technical recession, if not an official one.

“The official definition is owned by the NBER and they will likely need more evidence before they would declare it as they look at a broader range of indicators than just headline growth,” writes Deutsche Bank’s Jim Reid. “However we’ll likely know we’re in it before it’s declared so it’ll be crucial to work out if this is the start to a descent into bigger problems or if that’s still some months away. Note it continues to be ‘when not if.’”

We’ll see how U.S. investors react when they return to work on Tuesday.

Write to Ben Levisohn at [email protected]