Why Rate Hikes Might Not Crash the Market in 2026

Key Points The Fed raised interest rates last week, for the first time since 2023. It was the first big move by new Fed Chair Kevin Warsh. Investors may have renewed faith in the Fed's independence and its goal of trying to slow inflation. 10 stocks we like better than S&P 500 Index › When the Fed raises interest rates, it can slow inflation and economic growth, and also weigh down the stock market. The Fed raised interest rates last week, the first time it's done so since 2023. But when it actually began raising rates in the previous year to slow down inflation, the results were devastating: the S&P 500 (SNPINDEX:^GSPC) fell by more than 19%. This time around, an increase in interest rates might not end up crashing the stock market .