Here's what you can expect stocks to do now that the Fed has cut interest rates
The Federal Reserve, as was widely expected, cut benchmark borrowing costs for the first time in more than a decade Wednesday afternoon — but the cut appears unlikely to improve Jerome Powell’s less-than-stellar stock-market record?
In fact, since 1990, the S&P 500 has gained on average 0.16% on the day of a 25-basis-point cut. One-month later, the broad-market benchmark is 0.57% higher. Double that cut and the market is 0.34% higher on the of the decision day and 1.25% higher a month later. A 75-basis-point reduction has resulted in a powerful 2.76% rally on average but 0.27% gain in the following 30-day period.
Cuts of 50-basis points and greater all resulted in losses in the coming quarter and half-year period, as the following table shows:
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