The Federal Reserve is widely expected to lower interest rates by 25 basis points later on Wednesday, bringing the federal funds target to 4.00%-4.25%—a policy shift that, while highly anticipated, may offer little fuel to a stock market already trading at all-time highs if history is any guide.
Over the past 25 years, the S&P 500 has often struggled following a Fed rate cut.
According to data from Seasonax, the benchmark index delivered a median return of -0.31% in the 30 trading sessions following a rate reduction. The average return was even worse, at -1.20%, with more than half of the past 31 cuts followed by negative returns.
S&P 500: 30-Day Returns After Fed Rate Cuts (2001–2025)
| Cut Date | Start Price | End Date | End Price | Change (%) |
|---|---|---|---|---|
| 03 Jan 2001 | 1,347.56 | 15 Feb 2001 | 1,326.61 | -1.55% |
| 31 Jan 2001 | 1,366.01 | 15 Mar 2001 | 1,173.56 | -14.09% |
| 20 Mar 2001 | 1,142.62 | 02 May 2001 | 1,267.43 | +10.92% |
| 18 Apr 2001 | 1,238.16 | 31 May 2001 | 1,255.82 | +1.43% |
| 15 May 2001 | 1,249.44 | 27 Jun 2001 | 1,211.07 | -3.07% |
| 27 Jun 2001 | 1,211.07 | 09 Aug 2001 | 1,183.43 | -2.28% |
| 21 Aug 2001 | 1,157.26 | 09 Oct 2001 | 1,056.75 | -8.69% |
| 17 Sep 2001 | 1,038.77 | 29 Oct 2001 | 1,078.30 | +3.81% |
| 02 Oct 2001 | 1,051.33 | 13 Nov 2001 | 1,139.09 | +8.35% |
| 06 Nov 2001 | 1,118.86 | 19 Dec 2001 | 1,149.56 | +2.74% |
| 11 Dec 2001 | 1,136.76 | 25 Jan 2002 | 1,133.28 | -0.31% |
| 06 Nov 2002 | 923.76 | 19 Dec 2002 | 884.25 | -4.28% |
| 25 Jun 2003 | 975.32 | 07 Aug 2003 | 974.12 | -0.12% |
| 18 Sep 2007 | 1,519.78 | 30 … |