How the stock market tends to perform after back-to-back Fed rate cuts

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How the stock market tends to perform after back-to-back Fed rate cuts:

U.S. equity benchmarks on Thursday were nearing all-time highs, a day after the Federal Reserve trimmed interest rates for the second meeting in a row.

Here’s how S&P 500 index SPX, +0.00% has usually performed during the past periods in which the Fed has implemented a pair of rate cuts. One month later after, a pair of rate cuts, the S&P 500 tends to be up 1.56% higher on average and 1.74% during successive cuts. The market has climbed in three of the past five periods in which the Fed cut rates twice .

Steven G. DeSanctis, equity strategist at Jefferies, said not all rate cuts are created equal. Notably, this current series of interest-rate reductions have been billed by the Fed and others as “insurance cuts,” intended to dampen the harmful effects of a yearlong dispute over import duties between China and the U.S. that has threatened to amplify a global economic slowdown.

 

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