Without even getting into the crazy intraday swings we saw in emerging market indices like Brazil’s Ibovespa, today’s market action was not the type normally seen on days when the Fed hikes rates.  The chart below compares today’s intraday performance of the S&P 500 to all other Fed rate hike days since 1994.  As shown with the blue line in the chart, the S&P 500 has seen an average gain of 0.27% on historical rate hike days.  On those days, the S&P 500 typically trades higher leading up to the announcement, then sees some volatility following the announcement, but ultimately finishes the day slightly higher than it was right before the decision was announced.

Today’s action was completely different.  While the S&P 500 was up early in the trading day, it began to lose steam well before the 2 PM announcement and then saw a sharp intraday decline right after the announcement.  From there, it looked like we were going to see a similar move to the typical FOMC hike day as the S&P 500 went back into the green shortly after 3 PM.  Right after the S&P 500 moved into positive territory, though, the sellers stepped in, and we finished at the lows of the day with a decline of 0.40%.  It’s never a good feeling to go out at the lows of the day, but tomorrow is another day!

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