Bank of Montreal: U.S. stock markets tend to rise after Federal Reserve rate cuts

Jinse Finance reported, citing market news released by *Walter Bloomberg, that BMO Capital Markets pointed out that the U.S. stock market usually rises after the Federal Reserve begins to cut interest rates. Since 1982, during 10 rate-cutting cycles, the S&P 500 Index recorded positive returns 8 times, with an average increase of 10.4% in the following year. However, the specific range of gains varied greatly, from -23.9% to +32.1%, depending on whether the rate cuts extended the economic growth cycle or failed to prevent a recession. BMO stated that the current context is closer to those situations that brought positive returns: employment is still growing, GDP is above trend level, and S&P 500 earnings are expected to grow at a double-digit rate by 2026. The institution believes that the debate over the extent of Fed rate cuts "misses the point." Unless there are economic problems, the U.S. stock market remains in a bull market—however, given the strong rebound that has already occurred, future gains may be smaller.