The 6.8% figure is a historical median, not a forecast: across six Federal Reserve tightening cycles since 1994, LPL Financial found the S&P 500 was 6.8% higher one year after the first rate increase. The index’s median return three months after the first hike was instead negative 2.6%. That history may explain why one investor plans to add Berkshire Hathaway shares if prices fall, but it does not establish that Berkshire is the right buy—or that stocks will follow the same path this time.
What does the 6.8% figure measure?
LPL Financial examined six Fed rate-hike cycles beginning in 1994. Reuters reported the S&P 500’s median return one year after the first hike was 6.8%; Benzinga reported both that median and a 10.7% average return for the same one-year window. The average and median are different statistics: the average can be pulled up or down by unusually strong or weak cycles, while the median is the middle result when the six observations are ordered.
These are reported index returns, not returns guaranteed to an investor or to every stock in the index. The reports reviewed do not specify whether their calculations include dividends, and the underlying LPL dataset and detailed methodology were not available in those reports. The figures should therefore be understood as reported historical comparisons, not as a fully reproducible forecast model. See Reuters’ analysis, republished by Investing.com, and Benzinga’s corrected report.
Why the first months can look different from the one-year result
The first-year median does not mean stocks typically rise right away. Reuters reported that the S&P 500’s median return three months after the first hike was negative 2.6%. Benzinga reported negative average monthly S&P 500 returns in each of the first four months after an initial hike across the cycles it examined. The measures differ—one is a three-month median and the other describes monthly averages—so they should not be treated as interchangeable. Both point to the possibility of early weakness even when the one-year median is positive.
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Jeffrey Buchbinder, LPL Financial’s chief equity strategist, told Reuters that stocks historically “get a little jittery initially after the hiking cycles start,” then tend to return to the fundamentals of economic and earnings growth. The sequence is a historical pattern, not a timing signal precise enough to tell an investor when to buy.
Why the 2022–2023 cycle is an important exception
The S&P 500 was positive one year after the first hike in every cycle Reuters cited except 2022–2023. In that cycle, the index fell 25% from its peak, while the Fed raised rates by 525 basis points over 16 months amid recession concerns. Those details show why a favorable median cannot rule out a severe decline or a negative one-year outcome.
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Rate increases are only part of the setting. David Lefkowitz, head of US equities at UBS Global Wealth Management, told Reuters that the key question is whether Fed actions change expectations for economic growth or corporate profit growth. The six-cycle comparison does not prove that rate hikes caused each market move: growth prospects, earnings, valuations and other conditions can also affect stock prices.
What the Berkshire plan says—and what it doesn’t
The author’s plan, as described in the title-matching Yahoo Finance search-result snippet, is to buy more Berkshire Hathaway shares in anticipation of a market decline and increase the position if the share price falls. That is a personal market-timing choice. The full article page was rate-limited, so its position size, time horizon, rationale and risk controls cannot be verified from the accessible information.
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Scan for outdated or missing drivers - takes under a minuteDriver Scan →Clear out junk files and repair common Windows errorsFree Scan →Nor does the LPL statistic itself support a Berkshire-specific conclusion. It describes the S&P 500 after Fed hikes, not Berkshire Hathaway, and it does not compare Berkshire with other investments. A broad index’s historical path cannot establish how an individual company’s shares will perform during a future rate cycle.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How to use the history without treating it as a forecast
For an investor considering a plan based on rate-hike history, the useful lesson is to distinguish a long-window historical statistic from a short-term prediction. Before acting, consider:
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- Time window: A three-month result and a one-year result answer different questions; early declines can coexist with a positive one-year median.
- Statistic: The 6.8% median is not the 10.7% average. Neither represents a guaranteed or typical individual outcome.
- Downside: The 2022–2023 exception demonstrates that a large drawdown and a negative one-year result remain possible.
- Investment choice: The figures concern the S&P 500. They do not establish a buying case for Berkshire or any other individual security.
- Plan details: Decide in advance how much to invest, what would trigger additional purchases, and how the position fits your time horizon and ability to tolerate losses. The historical figures do not supply those personal risk controls.
Reuters reported on September 24, 2026, that the Fed had raised its benchmark rate for the first time since 2023 in September and signaled another increase by year-end. That is time-sensitive context, not a substitute for checking the latest Federal Open Market Committee statement. Even when the policy setting is current, past market reactions remain a limited guide to what happens next.
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