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
   2025-10-24: 6791.68994141 USD
with:
   US Fed Discount Rate
   US: DISC
   2025-10-24: 4.25000000 USD

                S&P 500        US Fed Discount Rat
               ^GSPC  Growth%        DISC  Growth%
           ---------- -------   ---------- -------
2025-10-24   6,791.69  100.00         4.25  100.00
2025-10-23   6,738.44   99.22         4.25  100.00
2025-10-22   6,699.40   98.64         4.25  100.00
2025-10-21   6,735.35   99.17         4.25  100.00
2025-10-20   6,735.13   99.17         4.25  100.00
2025-10-17   6,664.01   98.12         4.25  100.00
2025-10-16   6,629.07   97.61         4.25  100.00
2025-10-15   6,671.06   98.22         4.25  100.00
2025-10-14   6,644.31   97.83         4.25  100.00
2025-10-13   6,654.72   97.98         4.25  100.00
2025-10-10   6,552.51   96.48         4.25  100.00
2025-10-09   6,735.11   99.17         4.25  100.00
2025-10-08   6,753.72   99.44         4.25  100.00
2025-10-07   6,714.59   98.86         4.25  100.00
2025-10-06   6,740.28   99.24         4.25  100.00
2025-10-03   6,715.79   98.88         4.25  100.00
2025-10-02   6,715.35   98.88         4.25  100.00
2025-10-01   6,711.20   98.81         4.25  100.00
2025-09-30   6,688.46   98.48         4.25  100.00
2025-09-29   6,661.21   98.08         4.25  100.00
2025-09-26   6,643.70   97.82         4.25  100.00
2025-09-24   6,637.97   97.74         4.25  100.00
2025-08-24   6,466.91   95.22         4.50  105.88
2025-07-24   6,363.35   93.69         4.50  105.88
2025-06-24   6,092.18   89.70         4.50  105.88
2025-05-24   5,802.82   85.44         4.50  105.88
2025-04-24   5,484.77   80.76         4.50  105.88
2025-03-24   5,767.57   84.92         4.50  105.88
2025-02-24   5,983.25   88.10         4.50  105.88
2025-01-24   6,101.24   89.83         4.50  105.88
2024-12-24   6,040.04   88.93         4.50  105.88
2024-11-24   5,969.34   87.89         4.75  111.76
2024-10-24   5,809.86   85.54         5.00  117.65
2023-10-24   4,247.68   62.54         5.50  129.41
2022-10-24   3,797.34   55.91         3.25   76.47
2021-10-24   4,544.90   66.92         0.25    5.88
2020-10-24   3,465.39   51.02         0.25    5.88
2019-10-24   3,010.29   44.32         2.50   58.82
2018-10-24   2,656.10   39.11         2.75   64.71
2017-10-24   2,569.13   37.83         1.75   41.18
2016-10-24   2,151.33   31.68         1.00   23.53
2015-10-24   2,075.15   30.55         0.75   17.65
2014-10-24   2,067.56   30.44         0.75   17.65
2013-10-24   1,805.81   26.59         0.75   17.65
2012-10-24   1,416.18   20.85         0.75   17.65
2011-10-24   1,246.96   18.36         0.75   17.65
2010-10-24   1,180.55   17.38         0.75   17.65
2009-10-24   1,095.63   16.13         0.50   11.76
2008-10-24     896.24   13.20         1.75   41.18
2007-10-24   1,481.14   21.81         5.25  123.53
2006-10-24   1,400.63   20.62         6.25  147.06
2005-10-24   1,249.48   18.40         4.75  111.76
2004-10-24   1,173.82   17.28         2.75   64.71
2003-10-24   1,058.20   15.58         2.00   47.06
2002-10-24     936.31   13.79                     
2001-10-24   1,139.45   16.78                     
2000-10-24   1,314.95   19.36                     
1999-10-24   1,388.91   20.45                     
1998-10-24   1,163.63   17.13                     
1997-10-24     955.40   14.07                     
1996-10-24     757.02   11.15                     
1995-10-24     605.37    8.91                     
1994-10-24     453.69    6.68                     
1993-10-24     461.79    6.80                     
1992-10-24     431.35    6.35                     
1991-10-24     375.22    5.52                     
1990-10-24     322.22    4.74                     
1989-10-24     345.99    5.09                     
1988-10-24     273.70    4.03                     
1987-10-24     230.30    3.39                     
1986-10-24     249.22    3.67                     
1985-10-24     202.17    2.98                     
1984-12-01     181.18    2.67                     

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