JPMorgan reports that the S&P 500 has rallied by about 25% in the past year, significantly above its historical average gain of 4% in the 12 months before the first Federal Reserve rate cut. Historically, the Fed has cut rates 12 times in the past 40 years when the S&P 500 was within 1% of an all-time high. In each instance, the market was higher a year later, with an average return of around 15%, according to JPM DESK. While interest rate cuts may not impact S&P 500 performance as much as expected, positive earnings growth is a better indicator. When earnings grow, the S&P 500 returns 14% on average one year after rate cuts, but when they don't, there is not much appreciation.