# Goldman: a Fed hike stings, then stocks recover

> Markets put 90% odds on the first rate hike in three years, and history says the first three months hurt.
- Title: Goldman: a Fed hike stings, then stocks recover | Shortify
- Summary: Markets put 90% odds on the first rate hike in three years, and history says the first three months hurt. The start of a hiking cycle usually costs stocks…
- Keywords: federal reserve, rate hikes, s&p 500, goldman sachs, ai capex, business, finance, Goldman, Fed, hike, stings, stocks
- Source: Yahoo Finance — https://finance.yahoo.com/markets/article/stocks-could-have-a-tough-road-ahead-if-the-fed-hikes-rates-chart-of-the-day-155218683.html
- Published: 2026-09-14T15:52:18+00:00
- Read time: 1 min
- Topics: federal reserve, rate hikes, s&p 500, goldman sachs, ai capex, business, finance
## The hike case got loud
Oil is back over $100 a barrel, August payrolls came in at three times expectations, and core inflation ticked up faster than forecast. Markets price roughly 90% odds of a quarter-point hike Wednesday.
## History says minus 2%
Goldman Sachs analysts led by Ben Snider found the S&P 500 averages a negative 2% return in the three months after a hiking cycle begins, going back decades.
## Growth matters more than rates
Strong earnings usually carry stocks higher regardless of rate levels. The problem is that tightening itself dents the growth outlook that equities are leaning on.
## Tightening marks the peak
Goldman notes hiking cycles have historically topped out "high-valuation, high-concentration" bull markets. That describes this year's AI-dominated market almost exactly.

> past high-valuation, high-concentration bull markets
## AI build-out raises the stakes
The AI boom made this growth cycle unusually capital intensive, which Goldman says increases sensitivity to the cost of capital. A modest hike bites harder than it otherwise would.

> Today even a modest hiking cycle would likely weigh on stocks
## Companies can grow their way out
A firm holds its valuation if its risk premium falls or growth rises. Offsetting a one-point jump in capital costs takes two points of extra long-term growth, the kind capex and R&D can buy.
## Zoom out and the bull holds
Twelve-month returns after hiking cycles start average 9%. Markets already price three hikes by mid-2027, so the hawkish bar is high, and Goldman expects the bull market to continue.

> We expect the bull market to continue.
## Key takeaway

The start of a hiking cycle usually costs stocks about 2% over three months, but earnings growth, not rates, drives the next year.