Market Close
The end of a regular trading session on a stock exchange, after which no new orders are accepted until the next session.
What is Market Close?
Market close refers to the scheduled end of a stock exchange's regular trading session. In the United States, the NYSE and Nasdaq close at 4:00 PM Eastern Time on weekdays, excluding market holidays. The official closing price is determined by a closing auction—typically the Market-on-Close (MOC) mechanism—that matches accumulated buy and sell orders at a single clearing price. This closing price is critically important: it is used to calculate the value of major stock indices (S&P 500, Dow Jones), to price mutual fund net asset values (NAVs), to settle options and futures at expiration, and as the basis for performance reporting. After the 4:00 PM close, extended-hours trading can continue until 8:00 PM, but with significantly reduced volume and wider spreads. Prices in after-hours sessions do not affect the official closing price.
Example
At 3:50 PM ET on the last Friday of each month, the S&P 500 index rebalancing trades are concentrated as funds that track the index submit large MOC orders to align their portfolios with the updated constituent weights. This surge in closing auction volume at month-end is a predictable pattern that active traders monitor.
Source: NYSE — Closing Auction