Fed’s 25bp Hike Shakes S&P 500 Outlook and Earnings Guidance
Unanimous 25bp Fed rate hike shifts Wall Street’s view of SPX momentum and could reshape earnings forecasts and guidance, affecting volatility, bonds and equity outlooks.
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What stands out
Wednesday’s unanimous Federal Open Market Committee (FOMC) decision to raise rates by 25 basis points (bps) is the sort of modest headline that still changes the math. Diane King Hall’s point, that the hike alters how Wall Street reads S&P 500 (SPX) forward momentum and how companies will shape earnings guidance, matters because it reshuffles expectations. With the 30-year Treasury at a 19-year high, the cost of capital and the discount rates investors apply to future profits just crept higher, and that small creep can make growth promises look a lot less certain.