With the Fed cutting rates today, we highlight the performance of the S&P 500 during easing cycles.
We define a rate cut cycle as any period where the Fed cut interest rates at least three times without hiking rates. Shaded areas represent periods where we analyzed the Discount Rate. The market has gone up during 11 of the 12 easing cycles analyzed, with the only down period coming during the last one (which investors remember the most).
The average gain in the first month following the start of an easing cycle is 2.99%, and the average gain during entire rate cut periods is 15.33%.