Goldman Sachs analysts led by Ben Snider wrote over the weekend that if the Federal Reserve issues its first rate hike in three years this week, the equity market could face a tough period. Historically, the S&P 500 index has seen an average three-month return of negative 2% at the start of a Fed hiking cycle. The analysts attribute this to tightening cycles weighing on economic growth, marking the peak of high-valuation bull markets, and the capital-intensive nature of the current AI boom increasing sensitivity to capital costs. However, they also noted that the S&P 500 has averaged a 12-month return of 9% after such cycles, and the market may have already priced in 75 basis points of tightening by mid-2027, potentially mitigating the immediate impact.