Business
What Happens to Stocks If the Fed Lifts Rates
Stocks were on the rise in what could be the major indexes’ best Fed decision day in years, but the path forward could be volatile.
The S&P 500 rose 0.3%, and the Nasdaq Composite rose 0.7%. Both indexes were on track for their best FOMC decision day since 2025. The Dow Jones Industrial Average was roughly flat.
Historically, stocks tend to underperform in the near term after the Fed’s first rate increase in a monetary tightening cycle, Dow Jones Market Data showed. Just ahead of the 2:00 p.m. ET decision, markets were pricing in a more than 90% chance of the Fed raising rates, according to CME Fed Watch.
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