A first-ever Fed September interest-rate hike could set stocks reeling Wednesday

With the Federal Reserve all but certain to raise interest rates on Wednesday, investors may need to brace for sudden, unexpected market volatility as stocks have been underperforming on Fed Days in recent months.

Data published by Bespoke Investment Group Tuesday indicate that stocks, on average, fell 0.13% on the last 10 times the central bank held its policy meetings.

Adding to potential trouble, George Goncalves, head of U.S. rates strategy at Nomura, notes that a Wednesday rate hike would mark the first time that the Fed has tightened in September, a month in which the stock market historically has not performed well.

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