LPL Financial analysis reveals that the S&P 500 typically recovers from initial Fed rate-hike volatility to deliver double-digit returns within one year, suggesting current market fears may be overstated.
Historical analysis suggests the S&P 500 tends to recover and rise after initial Fed rate hikes, with an average 10.7% gain over 12 months.
Historical data from LPL Financial indicates that Federal Reserve rate-hike cycles rarely derail long-term bull markets. While the S&P 500 often faces volatility in the four months following an initial rate increase, the index has historically posted an average gain of 10.7% over the subsequent 12-month period.
While stocks often experience a short-term dip in the four months following an initial rate hike, historical data shows the S&P 500 generally recovers to post an average 10.7% gain over the following year.