Learn the stock market › Why does a stock move? › Lesson 6 of 9
Interest rates and the stock market
Three ways rates reach a stock
Loans. Companies and households borrow. Higher rates make those loans dearer, so profits can shrink and purchases can fall.
The alternative. If a savings account or a government bond pays more, a stock has to offer more to be worth the risk. Buyers then pay less for it.
The future. A dollar in ten years is worth less today when rates are high. That hits hardest where profits lie far ahead.
How the market moves on decision day
We counted 23 decisions by the Federal Reserve since January 2024, on the dates it publishes itself. The decision comes after Stockholm has closed, so Stockholm answers in the next session. Here are the latest six.
| Rate decision | S&P 500 that day | Stockholm next session |
|---|---|---|
| Oct 28, 2026 | +0.28% | +0.41% |
| Sep 16, 2026 | −0.45% | +1.25% |
| Jul 29, 2026 | −1.52% | +0.45% |
| Jun 17, 2026 | −1.21% | +0.55% |
| Apr 29, 2026 | −0.04% | +0.66% |
| Mar 18, 2026 | −1.36% | −3.53% |
The S&P 500's median move was 0.47% up or down on decision day, against 0.50% on a normal day. It rose 8 of 23 times.
So decision day has been no larger than a normal day. That sounds odd, but rate decisions are usually expected. The market has already set its price when the news comes, and only surprises move it. It works the same way as earnings reports.
The Riksbank's decisions are not included here. We hold no dates for them.
Test yourself
A central bank raises rates, and stocks rise the same day. How can that happen?
What it looked like when rates rose fast is in The 2022 rate shock.
Source
- Dates of the decisions: Federal Reserve, meeting calendars.
How is it going today? How the market did.