Bank of Montreal: U.S. stocks tend to rise after Fed cuts interest rates

According to the report of *WalterBloomberg, Montreal Bank Capital pointed out that US stock markets usually rise after the Federal Reserve starts to cut interest rates. Since 1982, the S&P 500 has recorded positive returns eight times in the 10 rate cut cycles, with an average increase of 10.4% the following year. However, the specific gains vary widely, ranging from -23.9% to 32.1%, depending on whether the rate cut extends the economic growth cycle or fails to stop the recession. Bank of Montreal said the current context is closer to those that bring positive returns: Jobs are still growing, GDP is above trend, and the S&P 500 earnings are expected to grow at double-digit rates by 2026. The agency believes that the debate over the extent to which the Fed rate cut "has not grasped the point." Unless there is a problem with the economy, U.S. stocks are still in a bull market—but given that there is a strong rebound now, the gains may be smaller in the future.