What will happen after first cut ?

Based on yesterday's Federal Reserve meeting, while there hasn't been a move yet, the likelihood of a rate cut in September is high. A compelling study from Goldman Sachs examines the typical behavior of the S&P 500 following the first rate cut, drawing on data from 1984 and analyzing eight Fed cutting cycles. Over the past 40 years, two distinct scenarios have emerged. In five out of eight cases, where the economy did not enter a recession, the stock market increased by more than 10% in the 12 months following the initial cut. Conversely, in scenarios where the economy fell into a recession, stocks declined by more than 10%. We believe we are currently in the first scenario but will remain vigilant for any signs of economic weakness.