Barclays Sees Low-Single-Digit S&P 500 Pullback Post-Hike; $100B SpaceX Retail Frenzy
BCS•Barclays analysis finds that S&P 500 returns are typically muted, averaging low-single-digit declines, in the first three months after the Federal Reserve resumes rate hikes following an easing cycle. In contrast, recent retail demand for the SpaceX IPO exceeded $100 billion, fueling $2 billion in ETF inflows and surging activity across alternative trading venues.
1. Barclays Historical Analysis Shows Muted S&P 500 Returns Post-Hike
Barclays examined five prior instances where the Federal Reserve paused after cutting rates and then resumed hikes. It found that the S&P 500 typically delivered muted returns in the six months leading into the first hike but then averaged low-single-digit declines over the two weeks to three months following the rate increase.
2. SpaceX IPO Retail Frenzy Drives ETF and Alternative Trading Flows
Retail investors submitted over $100 billion in orders for SpaceX’s IPO, vastly exceeding available allocations. This scramble propelled more than $2 billion into SpaceX-linked ETFs and generated over $25 million in alternative-market volume, with over 20 new ETF filings and leveraged products surging as much as 80% before trading halts.
