U.S. stock markets are open for trade on Monday, but bond markets are closed in observance of Columbus Day.
Stock markets will maintain regular trading hours, with the Dow Jones Industrial Average DJIA, -0.01% the S&P 500 index SPX, -0.11% and the Nasdaq Composite Index COMP, +0.07% set to resume a record-setting rally, albeit in low-volume trade.
However, bond traders are off as recommended by the Securities Industry and Financial Markets Association, known as Sifma.
The holiday is one of only two in which stock and bond-market holidays diverge. Veterans Day is the other.
Here’s perhaps why.
Columbus Day marks a state and federal holiday, begun back in 1792 and declared a federal day off in 1937 by President Franklin D. Roosevelt. Federal offices, including the U.S. Treasury Department, are closed. That means, Treasurys—a big chunk of typical trading activity on regular days and a key benchmark—are also forced to take a holiday.
Columbus Day isn’t without its controversy as a holiday intended to celebrate Christopher Columbus for sailing the ocean blue in 1492. Firstly, not all states celebrate the Italian explorer’s day on the same day. Tennessee tends to celebrate the holiday on Friday. Some states don’t acknowledge the day at all, with Alaska, Vermont, Hawaii and South Dakota choosing not to observe it.
Some regions choose to celebrate Indigenous Peoples Day, which honors Native Americans and challenges the concept that Columbus was the first to discover America. The holiday has been gaining support, as an alternative to Columbus Day.
Meanwhile, Treasurys on Friday fell, pushing yields higher, amid a selloff fueled by the key labor-market report that revealed a pickup in wage growth, which may point to a revival of inflation and cement expectations for one additional rate increase by the Federal Reserve before the end of 2017. Higher inflation chips away at a bond’s fixed value.