Will The Conclusion Of Fed Rate Hikes Trigger S&P 500's Double-Digit Growth? Here Is What This Analyst Says

Analysts are foreseeing the wind-up of the Federal Reserve’s rate hikes, an event that could potentially result in a substantial increase in the S&P 500 within the next year.

A recent report from Business Insider points out that historical data indicates that the wrap-up of rate hikes typically leads to significant gains in the stock market. Jessica Rabe, an analyst from DataTrek, stated that U.S. equities usually experience substantial rallies that exceed the average price return of 9-10% in the year following the end of Fed rate increases.

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Based on these historical trends, the S&P 500 index, which has stayed largely steady since July 26th—the date considered the last hike of this cycle—could potentially experience a rally by 17 percent through the first half of 2024. Several experts, including Jeremy Siegal, foresee the introduction of rate cuts as early as March of next year.

However, Rabe also highlighted mixed results in the months following the rate cuts by the central bank. While the markets typically rally in the month following the cut, the S&P 500 saw declines of 9.6% and 17.8% in the year after the cuts that started in 2001 and 2007 respectively.

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