Key facts
- US stocks are expected to weaken as the Federal Reserve begins raising interest rates.
- Historically, the S&P 500 has recovered within a year after initial slides during past hiking cycles.
- The S&P 500 has gained a median 6.8% a year later in past hiking cycles.
US stocks are poised for weakness as the Federal Reserve begins to raise interest rates. Investors are closely monitoring the aggressiveness of the central bank's hikes and the subsequent response of the economy. Historical data suggests that while stocks may experience initial declines during rate-hiking periods, they tend to recover relatively quickly. Over past hiking cycles, the S&P 500 has shown a median gain of 6.8% one year after the initial rate increases.