Wall Street Expects Bad News From the Federal Reserve This Week. History Says a Stock Market Correction May Follow.
Investors expect the Fed to raise interest rates this week, and new rate-hike cycles have often precipitated stock market corrections.
Overview
The U.S. stock market is having another fantastic year, driven by massive spending on artificial intelligence infrastructure. Year to date, the broad-based S&P 500 (SNPINDEX:^GSPC) has added 12%, the technology-heavy Nasdaq Composite (NASDAQINDEX:^IXIC) has advanced 13%, and the blue chip Dow Jones Industrial Average (DJINDICES:^DJI) has added 9%.
However, Wall Street expects the Federal Reserve to raise interest rates this week, potentially marking the start of a new tightening cycle. Historically, the first rate hike in a new tightening cycle has often correlated with stock market corrections. Here are the important details.
Image source: Official Federal Reserve Photo.
Details
Source
Originally published at www.fool.com.