What Is the Relationship Between S&P 500 Index and US Fed Discount Interest Rates?

The Relationship Between S&P 500 Index and US Fed Discount Interest Rates can be summarized as:

• Interest rates tend to negatively affect the S&P 500 Index.
• Central banks raise interest rates to cool the economy which decreases the S&P 500 Index.
• Central banks lower interest rates to stimulate the economy which increases the S&P 500 Index.

Compare:
   S&P 500
   SNP: ^GSPC
   2026-08-20: 7641.16015625 USD
with:
   US Fed Discount Rate
   US: DISC
   2026-08-20: 3.75000000 USD

                S&P 500        US Fed Discount Rat
               ^GSPC  Growth%        DISC  Growth%
           ---------- -------   ---------- -------
2026-08-20   7,641.16  100.00         3.75  100.00
2026-08-19   7,707.98  100.87         3.75  100.00
2026-08-18   7,691.76  100.66         3.75  100.00
2026-08-17   7,745.06  101.36         3.75  100.00
2026-08-14   7,785.76  101.89         3.75  100.00
2026-08-13   7,798.99  102.07         3.75  100.00
2026-08-12   7,748.50  101.40         3.75  100.00
2026-08-11   7,728.20  101.14         3.75  100.00
2026-08-10   7,753.11  101.47         3.75  100.00
2026-08-07   7,757.64  101.52         3.75  100.00
2026-08-06   7,709.96  100.90         3.75  100.00
2026-08-05   7,723.55  101.08         3.75  100.00
2026-08-04   7,736.52  101.25         3.75  100.00
2026-08-03   7,600.50   99.47         3.75  100.00
2026-07-31   7,489.72   98.02         3.75  100.00
2026-07-30   7,437.63   97.34         3.75  100.00
2026-07-29   7,316.15   95.75         3.75  100.00
2026-07-28   7,428.78   97.22         3.75  100.00
2026-07-27   7,413.18   97.02         3.75  100.00
2026-07-24   7,411.98   97.00         3.75  100.00
2026-07-23   7,408.30   96.95         3.75  100.00
2026-07-20   7,443.28   97.41         3.75  100.00
2026-06-20   7,500.58   98.16         3.75  100.00
2026-05-20   7,432.97   97.28         3.75  100.00
2026-04-20   7,109.14   93.04         3.75  100.00
2026-03-20   6,506.48   85.15         3.75  100.00
2026-02-20   6,909.51   90.42         3.75  100.00
2026-01-20   6,796.86   88.95         3.75  100.00
2025-12-20   6,834.50   89.44         3.75  100.00
2025-11-20   6,538.76   85.57         4.00  106.67
2025-10-20   6,735.13   88.14         4.25  113.33
2025-09-20   6,664.36   87.22         4.25  113.33
2025-08-20   6,395.78   83.70         4.50  120.00
2024-08-20   5,597.12   73.25         5.50  146.67
2023-08-20   4,369.71   57.19         5.50  146.67
2022-08-20   4,228.48   55.34         2.50   66.67
2021-08-20   4,441.67   58.13         0.25    6.67
2020-08-20   3,385.51   44.31         0.25    6.67
2019-08-20   2,900.51   37.96         2.75   73.33
2018-08-20   2,857.05   37.39         2.50   66.67
2017-08-20   2,425.55   31.74         1.75   46.67
2016-08-20   2,183.87   28.58         1.00   26.67
2015-08-20   2,035.73   26.64         0.75   20.00
2014-08-20   2,003.37   26.22         0.75   20.00
2013-08-20   1,632.97   21.37         0.75   20.00
2012-08-20   1,406.58   18.41         0.75   20.00
2011-08-20   1,218.89   15.95         0.75   20.00
2010-08-20   1,049.33   13.73         0.75   20.00
2009-08-20   1,020.62   13.36         0.50   13.33
2008-08-20   1,282.83   16.79         2.25   60.00
2007-08-20   1,473.99   19.29         5.75  153.33
2006-08-20   1,303.82   17.06         6.25  166.67
2005-08-20   1,220.33   15.97         4.50  120.00
2004-08-20   1,104.24   14.45         2.50   66.67
2003-08-20   1,008.01   13.19         2.00   53.33
2002-08-20     916.07   11.99                     
2001-08-20   1,133.58   14.84                     
2000-08-20   1,517.68   19.86                     
1999-08-20   1,320.41   17.28                     
1998-08-20     957.28   12.53                     
1997-08-20     899.47   11.77                     
1996-08-20     651.99    8.53                     
1995-08-20     561.88    7.35                     
1994-08-20     475.49    6.22                     
1993-08-20     463.56    6.07                     
1992-08-20     414.03    5.42                     
1991-08-20     395.43    5.17                     
1990-08-20     322.56    4.22                     
1989-08-20     351.45    4.60                     
1988-08-20     261.52    3.42                     
1987-08-20     329.80    4.32                     
1986-08-20     252.93    3.31                     
1985-08-20     188.63    2.47                     
1984-12-01     181.18    2.37                     

As you can see, when US inflation rate went up above 8% in 2022, US Fed raised the Discount Rate from 0.25% to 5.50% in about 1 year. This helped to bring the inflation rate down to 3% in 2023.

⇒ Cboe Indices: ^VIX - CBOE Volatility Index

⇐ SNP: ^GSPC - Standard and Poor's 500

⇑ US Market Indices

⇑⇑ Market Indices