Investors may be surprised by how equity has performed when policymakers slammed the brakes on monetary policy this year, despite the Fed's strategy of supersizing interest rate hikes.
Analysts at Bespoke Investment Group noted that the S&P 500 SPX, +2.62% has lost around 10% since Fed Chair Jerome Powell and his colleagues began hiking rates in mid-March.
During this period, the index has rallied at least 1.5% on each of the three previous Fed meeting days.
After Powell's first rate hike of 25 basis points, or a quarter percentage point, the large-cap benchmark gained 2.2% on March 16.
On May 4, Powell raised rates by 50 basis points, which was the largest move since 2002. On June 15, the S&P 500 gained 1.4%, the largest move since 1994 (see chart).
The analysts wrote, "All three times, stocks initially fell after Powell's press conference at 2 PM ET, but then rallied hard for the remainder of the day.
Stocks in the U.S. held on to gains Wednesday after the Fed raised rates by 75 basis points.
The S&P 500 gained 1.4%, while the Dow Jones Industrial Average DJIA, +1.37% gained 106 points or 0.3%, and the Nasdaq Composite COMP, 4.06% gained 2.6%. Powell will speak at 2:30 pm Eastern Time.
The Fed is likely to convey an open-minded message on rates Despite market expectations for a peak rate near 3.4% Ruskin says it is still too early to call a move of 50 or 75 basis points in September