The truth behind the performance of various assets after each rate cut by the Federal Reserve: A-shares in the petroleum and petrochemical industry relatively resistant to decline.

The Federal Reserve announced on the 17th local time that it would cut the federal funds rate target range by 25 basis points to between 4.00% and 4.25%, in line with market expectations. This is the Fed's second interest rate cut in 9 months since December 2024. Statistics show that since 2000, the Fed has cut interest rates a total of 32 times, with a higher probability of the Dow Jones Industrial Average and S&P 500 falling on the day of the announcement, with 18 out of the 32 times seeing a decline; while the Nasdaq had an equal number of increases and decreases. After each rate cut, the three major U.S. stock indexes did not show a clear pattern of short-term fluctuations. On the next trading day of A-shares after a rate cut, the main stock indexes generally fell. After the previous 31 rate cuts, the Shanghai Composite Index fell 17 times, with an average decline of 0.25%; the Shenzhen Component Index fell 17 times, with an average decline of 0.28%. Looking at industries, after each rate cut, sector indices of A-shares tended to fall more than rise. On average, only the petroleum and petrochemical industry index showed a positive trend, with an average increase of 0.11%. Other industries such as basic chemicals, computers, social services, household appliances, and communications resisted the drop relatively well, with average declines of less than 0.15%; the food and beverage, building materials, and electronics industries performed poorly, with average declines of over 0.4%. In terms of commodities, during rate cut cycles, London gold prices, representing precious metals, generally experienced significant increases, with the most significant increase from September 18, 2024 to the present, reaching 48.94%. In contrast, LME copper, representing industrial metals, and WTI crude oil, representing energy, have mainly declined. The trend of the U.S. dollar generally follows the Fed's rate cut cycles. Since 2000, the U.S. dollar index has generally shown a decline or remained at a relatively low level during rate cut cycles.