How will markets move after Federal Reserve cuts rates on Wednesday?

On Wednesday, the Federal Reserve will lower interest rates for the first time this year, citing damage in the labor market as the main reason behind the ￰0￱ will make 2025 only the third year since 1996 that the Fed has introduced rate cuts with the S&P 500 trading at all-time ￰1￱ part is unusual, since rate cuts typically arrive during ￰2￱ right now, the ￰3￱ is still growing, stocks are pumping , and inflation hasn’t ￰4￱ number of Americans saying jobs are easy to get dropped to 34.1% in August, the lowest number in four years and a 22-point decline since ￰5￱ Fed chair Jay Powell leans on labor as justification, everything else looks wild, with core inflation hitting 3.1% in August, way above the Fed’s long-term 2% ￰6￱ the growth front, GDP is still expanding at more than 3% a year, which isn’t the kind of data that usually calls for rate ￰7￱ cut collides with record-level stock rally Meanwhile, the S&P 500 just posted its 24th record high this year, as Cryptopolitan ￰8￱ bottoming in April, the index has climbed more than 35%, making this run one of the strongest five-month surges in recent history, rivaling the rebound after the 2008 financial ￰9￱ those numbers, Powell is expected to announce a 25 basis point cut on ￰10￱ the Federal Reserve did the same thing in 2019 and 2024, and each time, the stock market didn’t ￰11￱ the Fed eases within 2% of the all-time high, stocks tend to go higher a year ￰12￱ from Carson Research shows that in all 20 similar cases, the S&P 500 was up 12 months after, with an average gain of 13.9%.

But the short-term is a different ￰13￱ the month after a rate cut like this, the S&P has dropped 11 out of 22 times. That’s not ￰14￱ down months were most common in the late ’80s and early ’90s. Some analysts expect this week’s cut to follow the same pattern: a rocky 30 days, then a stronger year ￰15￱ environment is also different ￰16￱ cuts are landing in the middle of the AI ￰17￱ market is already pricing in faster growth, rising productivity, and expanding ￰18￱ inflation hasn’t backed off, which means lower rates could push everything even ￰19￱ and commodities surge ahead of the Fed As Cryptopolitan previously reported , Bitcoin and gold are already ￰20￱ have been rising in a straight line over the past few weeks, pricing in the reality that lower rates in a hot economy mean higher asset ￰21￱ has made several all-time highs, while Bitcoin stays stuck under $120,000, though its demand has remained ￰22￱ that started long before the Fed’s decision, and it’s being reinforced by every inflation print and every tech breakout.

“Markets are already reacting to the liquidity flood,” said Ryan Detrick, Chief Market Strategist at Carson Group. “The trend is ￰23￱ the Fed eases during strong growth, long-term assets benefit.” One of the stock market’s best performers last session was the Winklevoss twins’ crypto exchange Gemini Space Station, which debuted on Nasdaq ￰24￱ stock opened at $37.01 on the Nasdaq, about 32% above where its IPO was priced at $28. At one point, shares traded as high as $45.89. The stock closed higher by 14.3%, at $32.

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