Stock Market Investors Just Got Bad News From the Federal Reserve. History Says a Big Drop Could Follow.
Fed officials now believe higher interest rates will be necessary to curb inflation.
Overview
The U.S. stock market has performed well in the past year, in large part because of enthusiasm surrounding the artificial intelligence trade. The S&P 500 (SNPINDEX: ^GSPC) and Nasdaq Composite (NASDAQINDEX: ^IXIC) are up 20% and 27%, respectively, since June 2025. But investors recently got some bad news from the Federal Reserve.
Fed officials now anticipate at least one interest rate increase in 2026. That would mark the beginning of the fifth rate-increase cycle since 1999, and the last four cycles generally coincided with bear markets.
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Details
Source
Originally published at www.fool.com.
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Disclaimer: This article is for informational purposes only and does not constitute investment advice. Data may be delayed up to 15 minutes. Past performance is not indicative of future results. Consult a licensed financial advisor before making investment decisions.