The market is so ready for the Federal Reserve's big rate hike later on Wednesday that it could get some relief once it has passed. In a note to clients Wednesday, DataTrek Research's Nicholas Colas noted that the market's set-up heading into the Fed decision "is a near carbon copy" of the last two meetings. After those meetings, the S & P 500 rallied between 5.2% and 6.3% in the following one to two weeks, Colas said. "Could Chair Powell upend that track record with an especially hawkish message? Of course. But markets seem braced for his usual tough talk and should be relieved if he simply delivers his customary message," Colas said. The Fed is largely expected to raise rates by half a percentage point and announce it will start tapering its massive balance by $95 billion per month starting in June. Those increased expectations are the main reason why stocks have been acting so poorly. The S & P 500 dropped 8.8% in April for its biggest monthly decline since March 2020 and the benchmark just recently hit a new low for the year. The tech-heavy Nasdaq Composite is in a bear market. Colas added that while the previous post-FOMC rallies from earlier in the year did not last, "this year's trading patterns offer some hope over the near term." BlackRock's Rick Rieder also noted that the Fed could spark a relief rally , adding that the recent market sell-off could be nearing its end. "I think if you hear around where the base case is, I think markets would breathe a sigh of relief," said Rieder, BlackRock's chief investment officer of global fixed income. "You've gotten a lot of selling done. A lot of squaring of positions." The S & P 500 was down slightly in morning trading Wednesday.
