Fed Rate Cuts and the S&P 500: Historical Data, Tech Valuations, and 5 Key Assets to Watch
| Part 1: The Historical Reality of Fed Rate Cuts and S&P 500 Market Mechanics Subtitle: Why the S&P 500 Diverges After the First Rate Cut (Historical Data and Empirical Analysis) When the Federal Reserve pivots and initiates a rate-cutting cycle, financial markets instinctively celebrate expectations of lower borrowing costs and fresh liquidity. However, a close look at Wall Street history reveals that the S&P 500 does not always trace a straight upward trajectory following an initial cut. The defining question for the market's medium-to-long-term path is not simply "Did the Fed cut rates?" but rather, "Why was the Fed compelled to cut in the first place?" 1. Recessionary Defense Cuts vs. Mid-Cycle Insurance Cuts Stock market direction is driven by the complex interplay of corporate earnings (EPS), valuations, inflation, financial conditions, liquidity, and geopolitical developments. Yet, e...