25 Stocks to Target (and Avoid) After MLK Day

• The SPX has declined the day after MLK Day in seven of the past nine years, with Tuesday averaging a 0.22% loss and Friday typically being the worst trading day of the week
• Technology stocks like Nvidia (NVDA) and Workday (WDAY) have bucked the negative trend, with WDAY outperforming the SPX every year over the past decade during MLK week
• Energy companies and banking stocks are disproportionately represented among the worst performers during the holiday-shortened week

Market Summary: MLK Day Week Trading Patterns

Key Historical Trends

Historical analysis since 1998 reveals the holiday-shortened week following Martin Luther King Jr. Day has been challenging for equities. The S&P 500 Index (SPX) averages a -0.49% loss during MLK week, with only 43% of weeks closing positive—significantly underperforming the typical weekly average of +0.18% with 57% positive outcomes.

Daily Breakdown

Within the holiday week, Tuesday (the first trading day) averages -0.22% returns, with the SPX declining in seven of the past nine years post-MLK Day. Friday typically represents the worst performance, while Wednesday is the only day averaging positive returns.

Top Performers (Stocks to Target)

Technology stocks dominate the outperformers list:

• Nvidia (NVDA) leads historical gainers
• Workday (WDAY) has outperformed the SPX every year over the past decade during this period
• Software and hardware technology companies are overrepresented among winners

Underperformers (Stocks to Avoid)

Energy companies and banking stocks disproportionately populate the worst performers list during MLK week, showing consistent weakness during this trading period.

Market Implications

Despite the SPX's solid start to 2026, traders should exercise caution next week. The historical pattern suggests defensive positioning or sector rotation into technology may be prudent. The Tuesday session immediately following the holiday warrants particular attention given its poor track record.

The data presents a clear sector preference: favor technology exposure while reducing positions in energy and financials during this historically weak trading window.