What investors should expect from stocks after the Fed’s September meeting

Group 1 - The stock market's reaction to Federal Reserve rate cuts is not consistently positive, with historical data showing that in 40% of cases, the market was lower a month later, 37% lower after six months, and 27% lower after 12 months [1][2][3] - The market tends to rally when rate cuts occur in a strong economy, while it declines in a weak economy, indicating that the context of the rate cut is crucial [2][3] - Following a weak August jobs report, which increased the likelihood of a rate cut, the S&P 500 futures initially rose but then reversed, suggesting concerns about a potential recession [3][4] Group 2 - The correlation between daily changes in the S&P 500 and the probability of a Fed rate cut supports the notion of a market downturn post-rate cut [4][5] - Contrary to common belief, the S&P 500 performed better on days when the projected fed-funds rate was higher than the previous day, indicating an inverse relationship [5]