Which S&P 500 Stocks Move the Most on Fed Days?
Every S&P 500 member on every Fed decision day since July 2016: how much bigger its moves were than on a normal day, which sectors and stocks reacted most and least, and what happened on Oct 28, 2026.
ResourcesGuide
Which Sectors Do Well When Interest Rates Fall?
Falling rates help some sectors more than others, but the reason rates fall matters as much as the move. Here is what each sector did in the years long-term yields fell, and how to read the pattern.
Key takeaways
- Technology led in the two years long-term yields fell most since 2016. The tech sector ETF XLK returned +49.9% in 2019 and +43.6% in 2020, when the 10-year Treasury yield dropped 0.74 and 0.95 points (Exent’s data, FRED).
- The reason rates fall matters: in 2019, with no recession, every sector rose at least 11%. In 2020, a recession year, energy lost 32.7% and real estate 4.6%.
- Real estate is the most rate-sensitive sector by correlation: VNQ’s five-year correlation with long Treasuries was 0.69. Energy’s was 0.03.
- Fed cuts do not always bring long-term yields down. The Fed cut by a full point in late 2024, yet the 10-year yield rose from 3.95% to 4.58% over the year (FRED).
Market risk reading, cross‑asset context and an events calendar: see Exent →
Why do falling interest rates help some sectors?
Falling rates help sectors whose value depends on distant profits, cheap borrowing or steady payouts. Four mechanisms do the work:
- Valuation. Lower rates raise the present value of profits far in the future. Fast-growing technology companies benefit most.
- Borrowing costs. Real estate, utilities, homebuilders and small companies carry a lot of debt or depend on financing.
- Yield competition. When bonds and cash pay less, dividend payers such as utilities and REITs look relatively more attractive.
- Bank margins. Banks can earn less when rates fall, especially if long rates fall faster than short ones.
Which rate matters? Mostly the long-term yield, such as the 10-year Treasury, which the market sets. The Federal Reserve sets only the short-term rate. For how cuts reach stocks, see how Fed rate cuts affect stocks.
What did each sector do in years when rates fell?
Since 2016 the 10-year Treasury yield fell clearly in three calendar years: 2019, 2020 and 2025. It rose most in 2022. Sector ETF returns in those years:
| Sector ETF | 2019 (yield −0.74 pt) | 2020 (−0.95 pt) | 2025 (−0.39 pt) | 2022 (+2.25 pt) |
|---|---|---|---|---|
| Technology (XLK) | +49.9% | +43.6% | +24.6% | −27.7% |
| Communication services (XLC) | +31.1% | +26.9% | +23.1% | −37.6% |
| Consumer discretionary (XLY) | +28.4% | +29.6% | +7.4% | −36.3% |
| Real estate (VNQ) | +28.9% | −4.6% | +3.2% | −26.3% |
| Utilities (XLU) | +25.9% | +0.5% | +16.0% | +1.4% |
| Consumer staples (XLP) | +27.4% | +10.1% | +1.5% | −0.8% |
| Health care (XLV) | +20.5% | +13.3% | +14.5% | −2.1% |
| Financials (XLF) | +31.9% | −1.8% | +14.9% | −10.6% |
| Industrials (XLI) | +29.1% | +10.9% | +19.4% | −5.6% |
| Materials (XLB) | +24.2% | +20.5% | +9.9% | −12.3% |
| Energy (XLE) | +11.7% | −32.7% | +7.9% | +64.3% |
| Small caps (IWM) | +25.4% | +20.0% | +12.7% | −20.5% |
| S&P 500 (SPY) | +31.2% | +18.3% | +17.7% | −18.2% |
| Long Treasuries (TLT) | +14.1% | +18.2% | +4.3% | −31.2% |
- Technology (XLK)
- 2019 (yield −0.74 pt)
- +49.9%
- 2020 (−0.95 pt)
- +43.6%
- 2025 (−0.39 pt)
- +24.6%
- 2022 (+2.25 pt)
- −27.7%
- Communication services (XLC)
- 2019 (yield −0.74 pt)
- +31.1%
- 2020 (−0.95 pt)
- +26.9%
- 2025 (−0.39 pt)
- +23.1%
- 2022 (+2.25 pt)
- −37.6%
- Consumer discretionary (XLY)
- 2019 (yield −0.74 pt)
- +28.4%
- 2020 (−0.95 pt)
- +29.6%
- 2025 (−0.39 pt)
- +7.4%
- 2022 (+2.25 pt)
- −36.3%
- Real estate (VNQ)
- 2019 (yield −0.74 pt)
- +28.9%
- 2020 (−0.95 pt)
- −4.6%
- 2025 (−0.39 pt)
- +3.2%
- 2022 (+2.25 pt)
- −26.3%
- Utilities (XLU)
- 2019 (yield −0.74 pt)
- +25.9%
- 2020 (−0.95 pt)
- +0.5%
- 2025 (−0.39 pt)
- +16.0%
- 2022 (+2.25 pt)
- +1.4%
- Consumer staples (XLP)
- 2019 (yield −0.74 pt)
- +27.4%
- 2020 (−0.95 pt)
- +10.1%
- 2025 (−0.39 pt)
- +1.5%
- 2022 (+2.25 pt)
- −0.8%
- Health care (XLV)
- 2019 (yield −0.74 pt)
- +20.5%
- 2020 (−0.95 pt)
- +13.3%
- 2025 (−0.39 pt)
- +14.5%
- 2022 (+2.25 pt)
- −2.1%
- Financials (XLF)
- 2019 (yield −0.74 pt)
- +31.9%
- 2020 (−0.95 pt)
- −1.8%
- 2025 (−0.39 pt)
- +14.9%
- 2022 (+2.25 pt)
- −10.6%
- Industrials (XLI)
- 2019 (yield −0.74 pt)
- +29.1%
- 2020 (−0.95 pt)
- +10.9%
- 2025 (−0.39 pt)
- +19.4%
- 2022 (+2.25 pt)
- −5.6%
- Materials (XLB)
- 2019 (yield −0.74 pt)
- +24.2%
- 2020 (−0.95 pt)
- +20.5%
- 2025 (−0.39 pt)
- +9.9%
- 2022 (+2.25 pt)
- −12.3%
- Energy (XLE)
- 2019 (yield −0.74 pt)
- +11.7%
- 2020 (−0.95 pt)
- −32.7%
- 2025 (−0.39 pt)
- +7.9%
- 2022 (+2.25 pt)
- +64.3%
- Small caps (IWM)
- 2019 (yield −0.74 pt)
- +25.4%
- 2020 (−0.95 pt)
- +20.0%
- 2025 (−0.39 pt)
- +12.7%
- 2022 (+2.25 pt)
- −20.5%
- S&P 500 (SPY)
- 2019 (yield −0.74 pt)
- +31.2%
- 2020 (−0.95 pt)
- +18.3%
- 2025 (−0.39 pt)
- +17.7%
- 2022 (+2.25 pt)
- −18.2%
- Long Treasuries (TLT)
- 2019 (yield −0.74 pt)
- +14.1%
- 2020 (−0.95 pt)
- +18.2%
- 2025 (−0.39 pt)
- +4.3%
- 2022 (+2.25 pt)
- −31.2%
Returns: Exent’s data, as of Sep 30, 2026. Yield change: first to last trading day of each year, 10-year Treasury yield from FRED. Three falling-rate years are a small sample, and other forces such as the pandemic and the AI boom moved sectors too.
Does it matter why rates are falling?
Yes, more than anything else. Rates fall either because inflation is cooling in a healthy economy or because the economy is breaking down. The two look the same in the bond market and very different in the stock market.
2019 was the benign case: growth slowed, yields fell and every sector ETF in the table rose at least 11%. 2020 was the recession case. Yields fell further, yet energy lost 32.7%, financials 1.8% and real estate 4.6%, because falling profits and rents outweighed cheaper money. Technology and consumer discretionary still rose, helped by lockdown demand for their products. More on that pattern in how stocks perform in a recession.
Do Fed rate cuts lower long-term rates?
Not necessarily. The Fed sets the overnight rate. Long-term yields reflect expected inflation, growth and government borrowing too. The last two cutting rounds show both outcomes (FRED):
| Period | Fed target, upper bound | 10-year yield over the calendar year |
|---|---|---|
| Sep–Dec 2024 | 5.50% → 4.50% | 3.95% → 4.58% (up) |
| Sep–Dec 2025 | 4.50% → 3.75% | 4.57% → 4.18% (down) |
So a sector bet on “the Fed is cutting” is really a bet on long-term yields, which can go the other way. The sectors in the table above respond to the long yield.
Which sectors and stocks are most sensitive to interest rates?
One simple gauge is how closely a holding moves with long-term Treasury bonds (the TLT fund). Long bond prices rise when yields fall, so a higher correlation means the holding has tended to do better when rates fell. Five-year correlations of monthly returns, Exent’s data as of Sep 30, 2026:
| Holding | Correlation with long Treasuries (TLT) |
|---|---|
| Real estate (VNQ) | 0.69 |
| D.R. Horton (DHI), homebuilder | 0.61 |
| S&P 500 (SPY) | 0.56 |
| Small caps (IWM) | 0.54 |
| Utilities (XLU) | 0.49 |
| Duke Energy (DUK) | 0.48 |
| Technology (XLK) | 0.47 |
| Consumer staples (XLP) | 0.44 |
| Financials (XLF) | 0.42 |
| Energy (XLE) | 0.03 |
| Exxon Mobil (XOM) | −0.03 |
Most numbers are positive because stocks and bonds often fell together in this period, when inflation and rate shocks hit both. The ranking is the useful part: real estate and homebuilders sit at the top, energy at the bottom. See how rate-sensitive your portfolio is and TLT.
Are rates falling now?
Not as of October 2026. The Federal Reserve raised its target range to 3.75–4% on Sep 16, 2026, and the 10-year yield reached 5.31% on Oct 5, 2026, up from 4.19% at the start of the year (FRED). The same mechanisms work in reverse when rates rise, which is what 2022 showed.
- Know which of your holdings did best and worst in 2019, 2020 and 2022.
- Separate “rates fall, economy fine” from “rates fall, recession” when you think about scenarios.
- Check concentration: a portfolio full of rate-sensitive holdings is one bet on yields.
- Follow the 10-year yield, not just Fed decisions.
Sector rotation as a strategy is covered in sector rotation.
How to follow rates with Exent
- Market Intelligence tracks cross‑asset signals, including bond yields, with daily context and cited sources.
- Its events calendar lists scheduled market events such as Fed meetings.
- Macro Impact, which shows how your holdings react to rates, oil, the dollar and the economy, is rolling out.
Frequently asked questions
Historically technology, real estate, utilities, homebuilders and small caps, which depend on distant profits or cheap financing. In 2019, when the 10-year yield fell 0.74 points, the tech sector ETF returned 49.9% in Exent’s data.
Often they lag, because lending margins can narrow. In 2020 the financial sector ETF lost 1.8% while the S&P 500 ETF gained 18.3%, though the recession was a bigger factor than rates.
They are the most rate-sensitive sector by correlation with long Treasuries. They rose 28.9% in 2019 but fell 4.6% in 2020, when falling rates came with a recession.
Utilities rose 25.9% in 2019 and 16.0% in 2025, both years of falling yields, but only 0.5% in 2020. Their returns also depend on power demand and regulation. This is history, not a recommendation.
Growth stocks tend to benefit because more of their value lies in future profits. Technology led in both 2019 and 2020 in Exent’s data, and fell most in 2022 when yields jumped.
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Educational content, not investment advice. Examples are illustrative; past performance does not guarantee future results.