Good morning, investors. I’ll be speaking on stage at Future Proof conference in California today at 1 PM PT. We’ll be unpacking the Fed’s latest policy decision live, immediately after the news breaks.

Come say hi if you are here in Huntington Beach!

History says the stock market usually holds up when the Fed hikes rates.  

Markets see near-certain odds that the Federal Reserve raises interest rates Wednesday, though similar moves the last three decades have not posed a meaningful headwind to S&P 500 returns long-term.

Across the six Fed tightening cycles since 1994, stocks have averaged a negative return in the initial four months before turning positive by the fifth or sixth month, according to data from LPL Financial.

The average 12-month return for the S&P 500 after a rate hike is 6.7% and the median return is 10.7%. As the chart illustrates, the numbers are slightly skewed from two outliers:

Broadly, the data suggest that short-term central bank-driven choppiness has never lingered as a durable headwind for investors.

That’s good news for a market that’s already returned double-digits year-to-date and outperformed the typical calendar year.

“The key lesson from these prior cycles is that rate hikes do not typically derail bull markets,” said Jeff Buchbinder, chief equity strategist for LPL Financial.

He sees minimal recession risk at play today.

Corporate earnings continue to break records, economic growth is still intact, the labor market has not buckled, and the Fed is ultimately operating in an economy that’s remained more resilient than expected for several years in a row.

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The accessibility of Wall Street, with a distinctly Texas approach to ownership.

Know what you own and where it is.

🛢 Oil held above $106 a barrel as Houthi strikes and a Saudi pipeline outage kept crude elevated. Analysts warned that as much as 4% of global oil supply could be disrupted if the closure of the east-west pipeline extends. (CNBC)

📉 The Clarity Act collapsed. Lawmakers did not pass the key crypto legislation after Democrats said it did not rein in President Trump’s investments. (Barron’s)

🏦 Treasury Secretary Scott Bessent faced hostile House questioning. Lawmakers pressed Bessent on the $6 billion buyback plan that has not slowed the bond selloff and on the joint intervention with Japan to lift the yen. (CNBC)

🎯 Bessent also said the administration is exploring how to deliver Trump's $5,000 dividend without Congress or new deficit spending. He said it’s been in the works "for quite a while" but declined to specify the funding mechanism. (Yahoo Finance)

Jay Hatfield is the chief investment officer and CEO of Infrastructure Capital Advisors. He joined me on Full Signal to discuss his bullish S&P 500 call, why the Fed is fatally flawed, and the four stocks that he expects to compound no matter what interest rates do next.

Tune in on Spotify, Apple Podcasts, or YouTube.

🗓 September 16, 1992: George Soros’ Quantum Fund's roughly $10 billion short against the pound forced the UK to withdraw from the European Exchange Rate Mechanism and delivered about $1 billion in profit in a single day.

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