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
   2026-07-01: 7483.22998047 USD
with:
   US Fed Discount Rate
   US: DISC
   2026-07-01: 3.75000000 USD

                S&P 500        US Fed Discount Rat
               ^GSPC  Growth%        DISC  Growth%
           ---------- -------   ---------- -------
2026-07-01   7,483.23  100.00         3.75  100.00
2026-06-30   7,499.36  100.22         3.75  100.00
2026-06-29   7,440.43   99.43         3.75  100.00
2026-06-26   7,354.02   98.27         3.75  100.00
2026-06-25   7,357.49   98.32         3.75  100.00
2026-06-24   7,358.22   98.33         3.75  100.00
2026-06-23   7,365.46   98.43         3.75  100.00
2026-06-22   7,472.79   99.86         3.75  100.00
2026-06-18   7,500.58  100.23         3.75  100.00
2026-06-17   7,420.10   99.16         3.75  100.00
2026-06-16   7,511.35  100.38         3.75  100.00
2026-06-15   7,554.29  100.95         3.75  100.00
2026-06-12   7,431.46   99.31         3.75  100.00
2026-06-11   7,394.30   98.81         3.75  100.00
2026-06-10   7,266.99   97.11         3.75  100.00
2026-06-09   7,386.65   98.71         3.75  100.00
2026-06-08   7,405.73   98.96         3.75  100.00
2026-06-05   7,383.74   98.67         3.75  100.00
2026-06-04   7,584.31  101.35         3.75  100.00
2026-06-03   7,553.68  100.94         3.75  100.00
2026-06-01   7,599.96  101.56         3.75  100.00
2026-05-01   7,230.12   96.62         3.75  100.00
2026-04-01   6,575.32   87.87         3.75  100.00
2026-03-01   6,878.88   91.92         3.75  100.00
2026-02-01   6,939.03   92.73         3.75  100.00
2026-01-01   6,845.50   91.48         3.75  100.00
2025-12-01   6,812.63   91.04         4.00  106.67
2025-11-01   6,840.20   91.41         4.00  106.67
2025-10-01   6,711.20   89.68         4.25  113.33
2025-09-01   6,460.26   86.33         4.50  120.00
2025-08-01   6,238.01   83.36         4.50  120.00
2025-07-01   6,198.01   82.83         4.50  120.00
2024-07-01   5,475.09   73.16         5.50  146.67
2023-07-01   4,450.38   59.47         5.25  140.00
2022-07-01   3,825.33   51.12         1.75   46.67
2021-07-01   4,319.94   57.73         0.25    6.67
2020-07-01   3,115.86   41.64         0.25    6.67
2019-07-01   2,964.33   39.61         3.00   80.00
2018-07-01   2,718.37   36.33         2.50   66.67
2017-07-01   2,423.41   32.38         1.75   46.67
2016-07-01   2,102.95   28.10         1.00   26.67
2015-07-01   2,077.42   27.76         0.75   20.00
2014-07-01   2,003.37   26.77         0.75   20.00
2013-07-01   1,632.97   21.82         0.75   20.00
2012-07-01   1,406.58   18.80         0.75   20.00
2011-07-01   1,218.89   16.29         0.75   20.00
2010-07-01   1,049.33   14.02         0.75   20.00
2009-07-01   1,020.62   13.64         0.50   13.33
2008-07-01   1,282.83   17.14         2.25   60.00
2007-07-01   1,473.99   19.70         6.25  166.67
2006-07-01   1,303.82   17.42         6.25  166.67
2005-07-01   1,220.33   16.31         4.25  113.33
2004-07-01   1,104.24   14.76         2.25   60.00
2003-07-01   1,008.01   13.47         2.00   53.33
2002-07-01     916.07   12.24                     
2001-07-01   1,133.58   15.15                     
2000-07-01   1,517.68   20.28                     
1999-07-01   1,320.41   17.64                     
1998-07-01     957.28   12.79                     
1997-07-01     899.47   12.02                     
1996-07-01     651.99    8.71                     
1995-07-01     561.88    7.51                     
1994-07-01     475.49    6.35                     
1993-07-01     463.56    6.19                     
1992-07-01     414.03    5.53                     
1991-07-01     395.43    5.28                     
1990-07-01     322.56    4.31                     
1989-07-01     351.45    4.70                     
1988-07-01     261.52    3.49                     
1987-07-01     329.80    4.41                     
1986-07-01     252.93    3.38                     
1985-07-01     188.63    2.52                     
1984-12-01     181.18    2.42                     

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