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After nine months on pause, the Federal Reserve’s waiting game appears set to end this week with a long-awaited interest-rate cut. But with the stock market dancing in record territory, investors are watching whether the Fed’s decision — and its economic projections — will keep the rally alive or send the market into a tailspin.
History shows that U.S. stocks have typically posted positive returns immediately following initial rate cuts, as well as over the next 12 to 24 months. Since 1982, the S&P 500
SPX has delivered positive returns in the 12 months following such rate cuts for eight of the last 10 cycles, with an average gain of nearly 11%, according to data compiled by BMO Capital Markets (see table below).
This post was originally published on Market Watch
