Rate Hike Disappoints in Utilities, Commodities

The Federal Reserve's latest rate hike has led to disappointing performances in certain asset classes, according to Turning Point Market Research. The research compared the current tightening cycle with nine earlier ones since 1973 and found that utilities, gold, silver, and commodities lagged significantly.

Utilities fell by a record 4.36% during the first eight trading sessions after the hike, ranking last among the ten cycles. The Spot Commodity Index declined by 2.69%, while gold futures dropped 3.19% and silver futures plummeted 5.76%. These rankings were all tied for tenth place.

In contrast, equity indexes showed varying degrees of resilience. The S&P 500 gained 1.74% during the same period, ranking third among the cycles. However, the S&P 500 equal-weight index fell by 0.83%, and the Russell 2000 declined 1.43%. Information technology rose 5.48%, while healthcare gained 2.45%.

Treasury yields also increased during this period, with the 2-year yield rising by 18 basis points (bps) and the 10-year yield increasing by 23 bps. The dollar index DXY gained 0.89%. These performances were the weakest on record when compared to every tightening cycle since 1973.