Rate hikes in the current rate hike cycle have been a short term bearish factor for the stock market. The stock market has tended to go down or swing sideways during the next 2 weeks after a rate hike.

Here’s what happened to the S&P 500 after each rate hike in the current rate hike cycle.

Click here for the Excel file.

Here are the historical cases in detail.

March 21, 2018

The S&P 500 fell for a few days after this rate hike.

December 13, 2017

The stock market didn’t go up by much in the 2 weeks after this rate hike.

June 14, 2017

The stock market swung sideways during the 2 weeks after this rate hike.

March 15, 2017

The stock market trended downwards in the month after this rate hike.

December 14, 2016

The stock market swung sideways in the 1 month after this rate hike.

December 16, 2015

The stock market cratered after this rate hike.

Conclusion

The Fed will probably hike rates next Wednesday (June 13, 2018). With the S&P 500 near resistance, this rate hike is a short term bearish factor for the stock market. The stock market will probably either swing sideways or make a pullback.

However, rate hikes = a medium-long term bullish factor for the stock market (see study). So short term weakness, medium-long term bullish. Focus on the medium-long term, which is much easier to predict than the short term.

Click here for more market studies.

By Troy Bombardia

BullMarkets.co

I’m Troy Bombardia, the author behind BullMarkets.co. I used to run a hedge fund, but closed it due to a major health scare. I am now enjoying life and simply investing/trading my own account. I focus on long term performance and ignore short term performance.

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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