The Fed’s coming rate hikes don't spell doom for stocks 🏛

Earnings could keep growing as the Fed raises rates 📈

The S&P 500 rallied during 12 of the past 13 rate-hike cycles, registering 8.1% average annualized gains.

Historically, stocks have climbed during periods when the Federal Reserve embarked on a new cycle of interest-rate hikes.

The S&P 500 rallied during 12 of the past 13 rate-hike cycles, according to BofA’s Jared Woodard. On average, the index climbed 16% during the cycles, which amounts to 8.1% annualized.

Sure, higher interest rates mean higher financing costs, which would be an economic headwind, all else equal.

However, the Fed usually begins to tighten monetary policy during periods when the economy is growing and has some momentum. And economic growth tends to be associated with corporate earnings growth. As TKer readers know, earnings are the most important driver of stock prices.