Aside from people needing to sleep (back when computers didn't do our trading for us), there's also the matter of information flow: the reason quarterly earnings announcements happen after market close is to avoid giving slightly-faster people an edge.
If you could read and digest an earnings announcement faster than all your peers, you could make trades based on the new information before the price has moved.
While yes, some types of trading does rely on exploiting (usually small) information asymmetries, and "incorrect" pricing, it's much fairer if people have time to digest big required disclosures and all be able to get their orders in at (essentially) the same time: the opening bell the next day.
Markets move more or less instantly on big news nowadays. I mean on the order of seconds. Algos can parse data releases in real time and react in milliseconds.
Good GDP numbers at 2:00:00? It's gaping up at 2:00:01 and near the top of the trend by 2:00:05. I've seen it first hand many times.
But this idea is completely invalidated by the fact that many foreign companies (European and Chinese) are listed in U.S. exchanges, which means that the investors can only make informed decisions about the their investment if they are awake 24 hours/day
If you could read and digest an earnings announcement faster than all your peers, you could make trades based on the new information before the price has moved.
While yes, some types of trading does rely on exploiting (usually small) information asymmetries, and "incorrect" pricing, it's much fairer if people have time to digest big required disclosures and all be able to get their orders in at (essentially) the same time: the opening bell the next day.