Despite immediate market jitters following the Fed's 25-basis-point rate hike, historical data shows the S&P 500 has gained an average of 12.5% in the 12 months following similar initial policy moves.
The S&P 500 is the primary index analyzed, and the article's historical data indicates it was higher 100% of the time at the 12-month mark after 25bp initial rate hikes over the last 36 years.
The Dow Jones Industrial Average tumbled over 1% on the rate hike, but historical data shows stocks rise on average 12.5% at the 12-month mark after a standard 25-basis-point initial rate hike since 1990.
The Nasdaq Composite edged lower immediately after the rate hike, but the article's 36-year history of rate-hiking cycles suggests a positive 12-month outlook for the index.
The Federal Reserve, led by Chair Kevin Warsh, initiated a 25-basis-point rate hike, triggering immediate market volatility. Despite initial declines in the Dow, S&P 500, and Nasdaq, historical data from the past 36 years suggests a bullish outlook. Markets have consistently trended higher 12 months following standard quarter-point initial rate increases.
While markets often experience short-term volatility, historical data from the last 36 years shows the S&P 500 has risen 100% of the time at the 12-month mark following an initial 25-basis-point hike, with an average gain of 12.5%.