Wall Street is about to have sleepless nights! Countdown to the US stock market's "23/5" trading model—can the relay of global capital strengthen the path of a prolonged bull market?

For decades, U.S. stock exchanges have pressed the pause button each night, closing the markets for several hours. However, starting this December, as the U.S. stock market moves toward an around-the-clock 23-hour trading model, the trading lights on the exchanges’ servers will stay on much longer.

According to Zhitong Finance APP, Nasdaq, NYSE Arca, 24X National Exchange, and Cboe EDGX have already set plans to add an overnight trading session from 9 p.m. to 4 a.m. New York time, in addition to their existing regular, pre-market, and after-hours trading hours. This expansion, scheduled for implementation on December 6, aims to meet the increasing demand from overseas investors and to compete with crypto asset and prediction markets—both of which have disrupted traditional Wall Street business hours by trading 24/7 without interruption.

Overnight trading has existed for years, mainly through alternative trading systems, but it has made up only a small portion of overall trading activity. According to data released at a U.S. Securities and Exchange Commission roundtable last week, overnight trading accounted for about 1% of total stock volume in the second quarter. Although its scale is far smaller than daytime trading by any measure, overnight trading is growing rapidly, with volume surging by 358% year-on-year.

The forthcoming 23/5 trading model has sparked debate on how extended trading hours will affect global market participants. Supporters argue that the change will eliminate time-zone barriers, making it more convenient for overseas traders to enter the U.S. market. Skeptics, however, believe that lower liquidity and wider spreads will amplify trading risks.

The above chart shows the proportion of trading volume by different account types. Source: U.S. Securities and Exchange Commission, Customer and Account Data.

Wall Street Never Sleeps: Overnight Stock Trading Is Coming Soon

David Isdell, senior equity market analyst at Crisil Coalition Greenwich, said institutional investors are primarily concerned about the “market quality during extended trading hours,” while operational and staffing issues may not be their top priorities.

A survey conducted by his firm last year among buy-side equity traders found that market participants were not enthusiastic about 24/7 stock trading. Due to fewer active participants outside regular hours, investors may experience lower volumes, thinner liquidity, and wider bid-ask spreads. The survey indicated this could bring added operational risk and complexity, and even affect the well-being of traders themselves.

Since the survey was conducted in the second half of 2025, attitudes among this group have improved. Isdell stated that people now “see this change as more inevitable,” especially as regulators continue to push for related reforms.

For years, the concept of overnight trading has been embraced by retail investors and trading platforms. Brian Hyndman, CEO of Blue Ocean Technologies, said that once the new arrangements take effect in December, “the market participants who always get involved will be there and ready.” The company is currently one of the alternative trading system operators offering overnight trading services.

“However, I still believe there are segments of the industry, particularly buy-side institutions and investment banks, that have yet to participate,” he added. “They have always been hesitant about getting involved.”

Key market infrastructure providers are also preparing for this transition. The main clearing house for U.S. stock trades—the Depository Trust & Clearing Corporation—switched to a 24x5 model in June, running from 8 p.m. New York time on Sundays to 8 p.m. on Fridays. The Securities Information Processor (SIP), responsible for collecting and distributing quotes and transaction data, has also received regulatory approval to extend operation and support overnight trading.

Joseph Saluzzi, partner and co-head of equity trading at Themis Trading, said that proponents of the transition may expect that once the infrastructure is in place, institutional demand will follow.

However, he is skeptical about the shift.

“Institutional investors have no interest in trading in a market with low liquidity, wide spreads, and likely high volatility,” he said, noting that pre-market and after-hours trading currently only account for about 10% of overall trading activity. “In fact, if you wanted to make the opposite argument, it could be said that market hours are too long, not too short.”

At present, institutional investors remain in observation mode. According to Jeff O’Connor, head of market structure at Liquidnet, if the December 6 adjustment improves price discovery in night sessions, trading costs will ultimately fall, which could help institutional asset managers capture excess returns overnight.

Overseas investors are naturally most active during night trading hours. SEC data show that in the second quarter, overseas investors accounted for 37% of overnight volume, while institutional accounts contributed only 7%.

These trading activities are also highly concentrated. In August, an average of just 15 stocks contributed half of all overnight volume, often including companies registered in mainland China and Hong Kong with prices below $1. By contrast, it takes 256 stocks to reach half of the daytime volume during regular trading hours.

Currently, the core trading session for Nasdaq and NYSE lasts five days a week from 9:30 a.m. to 4 p.m. U.S. Eastern Time. In addition, both exchanges offer pre-market and after-hours sessions for limited types of trades: pre-market starts as early as 4 a.m., while after-hours runs from 4 p.m. to 8 p.m. After hours are extended in December, the exchanges will still pause for an hour of system maintenance from 8 p.m. to 9 p.m.

What Does the 23/5 Trading Model Mean for the U.S. Bull Market and Volatility?

The U.S. stock market is soon moving from the “New York trading day” toward an almost around-the-clock market covering global time zones. Nasdaq, NYSE Arca, 24X, and Cboe EDGX are advancing 23/5 trading around December 6, 2026, adding a 9 p.m. to 4 a.m. New York time overnight session while keeping an 8 p.m. to 9 p.m. maintenance window.

The commercial drivers behind this move are overseas investor demand and competition from constantly trading crypto assets and prediction markets: overnight volume jumped 358% quarter-over-quarter in the second quarter but still made up just about 1% of total U.S. stock volume, with foreign investors and institutional accounts contributing 37% and 7% respectively—indicating global demand is growing but institutional participation remains limited.

Recent regulatory progress shows the reform is in the system-preparation stage: Nasdaq announced six user acceptance testing sessions on September 28 and plans to launch pre-production testing on November 1; NSCC under DTCC extended clearing to 24x5 in June, the unified SIP tape has approval to extend operations, and all plan to go live in December.

Wall Street analysts continue to debate whether the 23/5 trading model will bring enough liquidity depth and reliable price discovery.

23/5 means five trading days a week, 23 hours a day, retaining the core session, essentially expanding capital access and price formation windows across time zones. Exchanges, night-trading platforms, and overseas—especially Asian retail investors—value convenience, while institutions care more about spreads, order depth, and block-trade execution costs.

Overnight trading currently features distinctive cross-time zone demand, but faces highly concentrated trades and limited institutional involvement. In market microstructure terms, when order books are thin, the same-sized trades move prices more easily, and market makers may widen spreads to compensate for inventory and hedging risks. Thus, “order any time” and “execute at fair cost any time” are not the same—liquidity still needs to catch up.

Based on microstructure logic, if orders are spread over longer periods in the early phase of reform but market making capital does not increase in step, thinner books at night could magnify price impacts from single trades and cause temporary dislocations; as institutional participation, unified market data, and arbitrage opportunities improve, news-driven shocks previously concentrated at the open may be digested in advance, possibly reducing open gaps but not necessarily total daily volatility. For the long-term bull market in U.S. stocks, 23/5 could lower friction for overseas investors, widen the potential capital pool, and after sufficient liquidity, reduce the liquidity premium; its function is primarily market efficiency and valuation support, while sustained bull runs still depend on enterprise free cash flow, productivity revolutions such as those driven by AI, and the interplay among rate expectations/U.S. Treasury yield curves and equity risk premiums. A longer trading clock makes it easier to channel capital into U.S. equities, but only consistent earnings growth determines how long the bull run can last.

Wall Street giant JPMorgan has begun to follow in the bullish footsteps of Goldman Sachs, Jefferies, and Yardeni Research by shifting its outlook for U.S. tech stocks, which is prompting both institutional and retail investors to increasingly adopt buy-the-dip strategies during recent market pullbacks. JPMorgan believes overall valuations for the high-weight “Magnificent Seven” (Mag 7) tech giants have largely normalized, and earnings growth is likely to become the main force supporting stock prices once again. According to JPMorgan, the Mag 7’s forward 12-month P/E relative to the broader market is now about a standard deviation below the historical median, the lowest in a decade.

Recently, Jefferies said that under the twin engines of an AI investment boom and AI-related earnings outperforming expectations, the S&P 500 Index is expected to soar to 8,000 by the end of 2026 and approach 9,000 in 2027. Jefferies’ logic is clear and compelling: in a cycle where AI-driven earnings growth is more than double the historical average, fighting the trend is dangerous. The firm’s 8,000 benchmark target for 2026 is based on S&P 500 EPS at $373 (up 35% year-over-year, far above consensus at 29%) and a 21.5x P/E ratio.