{"id":104266,"date":"2025-10-29T14:07:09","date_gmt":"2025-10-29T14:07:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/104266\/"},"modified":"2025-10-29T14:07:09","modified_gmt":"2025-10-29T14:07:09","slug":"the-fed-has-cut-rates-with-the-sp-500-at-a-record-four-times-before-heres-what-happened-next","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/104266\/","title":{"rendered":"The Fed has cut rates with the S&#038;P 500 at a record four times before. Here&#8217;s what happened next"},"content":{"rendered":"<p>It&#8217;s not often that the Federal Reserve eases monetary policy with the stock market this strong. But when it does, it&#8217;s like throwing gasoline on a fire. The Fed is widely expected to lower its overnight rate by a quarter percentage point on Wednesday. That would take place with the S &amp; P 500 at record levels. The benchmark closed at 6,890.89 on Tuesday and briefly traded above 6,900 for the first time. JPMorgan&#8217;s trading desk counts only four other instances in which rates were lowered with the S &amp; P 500 at an all-time high. One year out, the benchmark was higher each time with an average return of 20%, according to JPMorgan. The worst return was 15%. .SPX YTD mountain SPX year to date &#8220;That alone should be enough to get the market fully bulled up,&#8221; JPMorgan traders said. The cases are rare because typically the Fed cuts rates to boost a weakening economy that&#8217;s teetering on a recession and already hitting the stock market. Today is a rather unique environment where the Fed is trying to unwind a tightening policy that was needed to break a post-pandemic inflation spike. The economy today is showing very few signs of a recession, but is showing some recent labor weakness and a big bifurcation in confidence among high income and lower income groups. Ways to trade melt-up Scott Rubner, head of equity and equity derivatives strategy at Citadel Securities, advised clients buy call options on the Invesco QQQ Trust expiring in late November and December. &#8220;With financial conditions easing and retail participation at record highs, upside convexity remains attractively priced. This is an opportune setup to hedge right-tail exposure ahead of major tech earnings and a potential right-tail chase,&#8221; he said this week. Specifically, he highlighted the $655 calls expiring Nov. 28 and the $670 ones expiring Dec. 31. The QQQ fund tracks the tech-heavy Nasdaq-100 index. Call options give buyers the right to buy shares of the underlying asset at a set price for a specified period. Traders at Morgan Stanley highlighted health care stocks as potential beneficiaries from rate cuts into 2026. &#8220;The team notes Biotech, in particular, tends to see strong relative performance 6\u201312 months post the first Fed cut,&#8221; they said. The S &amp; P 500 health care sector has lagged the S &amp; P 500 this year, up just 5.7% while the overall benchmark has jumped 17%. The iShares Biotechnology ETF (IBB) has surged 19.3% in that time. ( Learn the best 2026 strategies from inside the NYSE with Josh Brown and others at CNBC PRO Live. Tickets and info here . )<\/p>\n","protected":false},"excerpt":{"rendered":"It&#8217;s not often that the Federal Reserve eases monetary policy with the stock market this strong. But when&hellip;\n","protected":false},"author":2,"featured_media":104267,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[357,42,942,55607,1579,68382,43,68381,3310,1760,40,38,41,39],"class_list":{"0":"post-104266","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-headlines","8":"tag-business-news","9":"tag-headlines","10":"tag-investment-strategy","11":"tag-ishares-biotechnology-etf","12":"tag-jpmorgan-chase-co","13":"tag-jyong-biotech-ltd","14":"tag-news","15":"tag-powershares-qqq-trust","16":"tag-sp-500-index","17":"tag-stock-markets","18":"tag-top-news","19":"tag-top-stories","20":"tag-topnews","21":"tag-topstories"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/104266","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=104266"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/104266\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/104267"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=104266"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=104266"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=104266"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}