The Thanksgiving holiday will begin tomorrow and US markets will be closed before reopening on Friday. Typically, that also is a pseudo-holiday as thinner liquidity conditions tend to prevail. So, let's try and take a look to see if there are any notable trends in the last few years in identifying what to expect from this year's festive period.
The table below shows the S&P 500 performance on the day before Thanksgiving and the day after i.e. Wednesday and Friday, in the last five years:
As you can see, there's not too much of a trend and I would argue that momentum matters more. The outlier though is the over 2% drop last year in the day after Thanksgiving, which owed to a new Covid variant emerging at the time as seen here.
Besides that, there is a slight tendency for stocks to gain in the day before Thanksgiving but I would argue that momentum perhaps matters more - similar to this year. In the day after, the mood tends to be more subdued.
As such, I would say that there is no real Turkey Day trade for stocks in general. Looking at things this year, the overall market is in an optimistic spot as stocks look poised to retest the year's highs. And that will overshadow anything that will take place during the festive period this time around.