By Matt Underwood Nasdaq’s ambitious plan to introduce 24-hour trading on its flagship U.S. exchange, slated for the second half of 2026, aims to capitalize on the increasing global demand for U.S. equities. This move, while potentially lucrative for the exchange, raises significant concerns about market stability and fairness.
The current daily pause in trading serves a crucial function: it prevents the market from spiraling into uncontrolled volatility. Removing this buffer could lead to a scenario resembling a crypto pump-and-dump scheme, where rapid price swings become the norm, potentially benefiting only sophisticated, well-resourced players at the expense of retail investors.
Concerns are being raised about the potential for increased market manipulation. The extended trading hours could provide ample opportunity for coordinated efforts to artificially inflate or deflate stock prices, enriching those with inside knowledge or superior technological capabilities. The potential for increased illegal activities, such as insider trading, is also a very real concern.
Furthermore, the proposed change would likely exacerbate the existing imbalance between institutional investors and individual traders. Institutions, with their extensive resources and technological advantages, would be better equipped to navigate the increased volatility and complexity of a 24/7 market, further widening the gap between them and retail participants.
The argument that this is driven by a desire to increase the global accessibility of U.S. stocks also holds some skepticism. Some believe the real motive may be to create a globally accessible, 24/7 stock exchange, with the Nasdaq aiming to be the first to establish such a platform. This would undoubtedly grant them an immense competitive advantage, potentially overshadowing the benefits claimed to accrue to international investors.
The potential implications for regular investors who employ a “buy and hold” strategy are troubling. Increased volatility could lead to significant short-term losses, irrespective of the long-term outlook. The constant pressure of 24-hour trading could erode the patience required for long-term investment strategies and possibly lead to rash decisions influenced by fleeting market swings.
This proposal seems to directly contradict the frequently expressed concerns among market participants about volatility. The fact that this change is being pursued despite these stated concerns raises questions about the priorities of those driving this initiative, suggesting that their true motives may differ from publicly stated ones.
The impact on mental health could also be significant. The relentless pressure of a 24-hour market could lead to increased stress and burnout among traders, potentially exacerbating existing sleep deprivation and substance abuse issues within the industry.
The concern that this move will further empower those who seek to profit from market instability is also valid. It could create a perfect environment for short-selling strategies, allowing large institutions to profit from downward market trends, further destabilizing the market and increasing risk for smaller players. The already present issue of insufficient regulatory oversight is likely to become even more problematic in a 24/7 market.
The timing of this announcement, coupled with recent economic uncertainties and outflows from the US market, adds another layer of complexity. Some believe this initiative is an attempt to mitigate the effects of current economic policies and to counter the loss of the US’s position as the world’s primary financial safe haven.
Ultimately, Nasdaq’s proposal to implement 24-hour trading is a high-stakes gamble. While it may offer potential gains for the exchange and certain market players, the potential negative consequences for market stability, investor protection, and overall economic health are substantial and warrant careful consideration. The likelihood of unintended, and possibly devastating, consequences outweighs the supposed benefits. The potential for the market to become highly unstable is quite high.