The Fed is expected to hike interest rates next Wednesday.
Rate hikes in the current rate hike cycle have been a short-term bearish factor for the stock market. The stock market has tended to go down or swing sideways during the next 2 weeks after a rate hike.
Here’s what happened to the S&P 500 after each rate hike in the current rate hike cycle.
Click here for the Excel file.
Here are the historical cases in detail.
March 21, 2018
The S&P 500 fell for a few days after this rate hike.
December 13, 2017
The stock market didn’t go up by much in the 2 weeks after this rate hike.
June 14, 2017
The stock market swung sideways during the 2 weeks after this rate hike.
March 15, 2017
The stock market trended downwards in the month after this rate hike.
December 14, 2016
The stock market swung sideways in the 1 month after this rate hike.
December 16, 2015
The stock market cratered after this rate hike.
Conclusion
The Fed will probably hike rates next Wednesday (June 13, 2018). With the S&P 500 near resistance, this rate hike is a short-term bearish factor for the stock market. The stock market will probably either swing sideways or make a pullback.
However, rate hikes = a medium-long term bullish factor for the stock market (see study). So short-term weakness, medium-long term bullish. Focus on the medium-long term, which is much easier to predict than the short term.
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