Chart is for illustrative purposes only. Past performance is not necessarily an indication of future results.
Last week, the Federal Reserve (Fed) delivered a widely anticipated 25-basis point rate cut. What caught the market’s attention was pushback by Fed Chair Powell on the certainty of a December cut. But, regardless of the pace of easing from here, history tells us that future equity market performance is positive when the Fed eases into a growing economy.
According to our research dating back to the 1980s, stocks delivered an average gain of 16.5% in the 12 months following the first cut of an easing cycle as long as a recession was avoided. The number ticks up to 44.5% over the first 24 months. While the Fed’s easing arguably started last year, we view the latest cuts and future expectations as a new cycle.
Given our outlook for continued positive economic growth over the next year, combined with an improving earnings backdrop, we expect more equity gains to come.
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MARK-835885-2025-11-06