S&P 500 Slumps as Fed Hikes Interest Rates Amid Inflation Fears

The S&P 500 is under pressure as interest rates rise due to the Federal Reserve's decision to hike interest rates, contrary to President Donald Trump's public push for lower rates. The Fed's move has raised concerns that borrowing costs may remain high or even increase further.

Historically, September is a weak month for the S&P 500, with the index falling in 55% of all Septembers since 1928 and losing an average of 1.1% during the month. While experts disagree on why September tends to be bad for stocks, concerns about the US economy have recently increased, raising the possibility of a stock market correction.

The Fed's decision to raise interest rates is a major new threat to the S&P 500. With most Fed officials signaling another quarter-point rate hike could come later in 2026, investors may need to prepare for borrowing costs to remain high or move even higher.