Wells Fargo: Taking history as a lesson, the Fed rate cut marks the beginning of a major drop in US stocks

Data from the Investment Research Institute of Fuguo Bank shows that a rate cut by the Federal Reserve often leads to a significant decline in the S&P 500 index. Investors should not equate a rate cut with a signal for the stock market to let its guard down. Investors should pay attention to the reasons for the rate cut. If it is to adjust real interest rates to accommodate a decrease in inflation, the stock market may perform well. However, if it is in response to macroeconomic or market turmoil, the stock market performance may be affected. WFII expects the S&P 500 index to target between 5100-5300 points by the end of 2024 and between 5600-5800 points by the end of 2025