The Odds of a September Rate Hike Just Jumped. Should You Still Buy the S&P 500?
Stocks generally react poorly to higher interest rates. Does that mean you should adjust your portfolio?
Overview
Following last week's stronger-than-expected jobs report, the odds of a Fed rate hike at next week's meeting jumped from around 35% to nearly 60%. This week's Consumer Price Index (CPI) inflation report could push that number even higher.
The U.S. economy added 162,000 jobs in August, well above expectations, while the unemployment rate remained steady at 4.1%. The June and July numbers were also revised higher, suggesting that the labor market may be more resilient than originally thought.
Details
This is good news for the economy, but not for stocks. The S&P 500 (SNPINDEX: ^GSPC) declined on Friday, anticipating that higher rates could slow future growth prospects.
Source
Originally published at www.fool.com.