Federal Reserve Rate Cut Helped Propel Markets Forward

The S&P 500 notched its first positive performance in a September since 2019.

September is typically the weakest month of the year for stocks, but thanks to the much-anticipated federal funds rate cut, the S&P 500 turned in its first positive performance in a September since 2019, achieving its 43rd record high of the year.

“The Federal Reserve [Fed] is recalibrating policy, and we are likely to see a series of rate cuts over the coming months as it gets closer to neutral, which is ultimately market friendly,” Raymond James Chief Investment Officer Larry Adam said.

The Fed took an unusual – but not entirely unexpected – step, cutting interest rates by 50 basis points (bps), rather than the usual 25, and is on track to successfully navigate a “soft landing” for the economy for the first time since 1995. The economy is showing resilience, the labor market remains stable, and inflation appears to be on a better path.

We’ll get into more detail shortly, but first, a look at the numbers year-to-date:

Rate cuts helped propel markets