S&P 500 Up 5 of Last 8 Fed Rate Hike Announcement Days

In the chart above the 30 trading days before and after the last 119 Fed meetings (back to March 2008) are graphed. There are four lines, “All,” “Up,” “Down,” and “Rate Hike Days.” Up means the S&P 500 finished announcement day with a gain, down it finished with a loss or unchanged. In 119 Fed meetings, there have been just 17 rate increases. These 17 increases are represented by Rate Hike Days. Of the 17 hike days, S&P 500 was down 10 times and up 7 times with an average gain of 0.19% on all 17. On the day after the last 17 rate hike announcements, S&P 500 has declined 0.74% on average.

Eight rate increases have occurred during the most recent tightening cycle that begun a little more than 1 year ago. During the current cycle S&P 500 has been up 5 times on announcement day and down 5 times on the day after. Of the 16 days examined, all but two had moves more than 1%. This would suggest more volatility is on tap for Wednesday and Thursday.