Fed rate cut is definitely good for the stock market? Analyst: Not necessarily! It depends on this factor

The impact of the Fed's interest rate cuts on the stock market depends on whether a recession is imminent. Historical data shows that the stock market usually rises in the days following the first rate cut, but declines in the weeks following when the economy begins to contract. While a recession may hit the stock market, investors can still benefit from holding bonds as bonds tend to outperform stocks during economic downturns. When a recession is avoided, stocks often outperform bonds. Additionally, earlier this week, US Treasury yields fell to their lowest level in over a year