CPI came in hot. What did stocks do last time?

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CPI came in hot. What did stocks do last time?

Both the US and Romanian inflation prints beat forecasts. Oil tells us where the next one is heading.

Historically, after the first rate hike of a cycle, stocks zigzagged for three months.

A year later, they were almost always higher.

October 15th, 2026 · 5 min read

Key takeaways

US inflation came in at 3.7%, versus 3.6% expected. In Romania it rose to 6.6%, from 6.2%.
Oil leads and CPI follows, so the next inflation print depends on whether oil holds above $90.
On September 16th, the Fed? began raising rates again, for the first time since 2023.
Since 1994, three months after the first hike, stocks were lower in 5 of 6 cycles.
After 12 months, the S&P? was higher in 5 of 6 cases.
2026 started differently: one month after the hike, the S&P was at +3.4%. Only once in six, in 2022, did the first month finish higher.

On October 14th, the S&P fell about 1.3%.

The right question isn't whether it was a bad day. It's what stocks do after the Fed starts raising rates.

I asked the same question for six cycles.

The result has two sides.

Both matter.

Definition

First hike of a cycle

The day a central bank raises its benchmark rate after a pause or a stretch of cuts. It matters because it changes direction: from money getting cheaper to money getting more expensive. Later hikes, if they come, stack on top of the first.

Inflation

Hotter than expected, on both sides of the Atlantic

US inflation for September came in at 3.7%, when the market expected 3.6%.

In Romania, it rose to 6.6%, from 6.2% in August.

The Romanian central bank has held its rate at 6.5% for years.

One tenth moved the market.

The Fed had already added a quarter point on September 16th.

The surprise now comes from inflation.

Government bond yields started climbing again, and the benchmark rate followed them.

3.75-4%The Fed rate after the September 16th hike, the first since 2023.

But first, it's worth knowing where that number comes from.

Oil

Oil leads, CPI follows

If you want to know what the next CPI will show, look at oil.

Oil moves first. Store prices catch up later.

In June, oil fell toward $69 a barrel. CPI dropped 0.4% that same month.

Then it went back toward $100.

Oil is the leader. CPI is just its shadow.

Right now oil sits around $94.

As long as it stays above $90, I don't expect inflation to fall.

If it drops below $90, the direction turns. That number is a level I watch, not a rule.

+0.6%How much CPI rose in a single month, in September, with oil back near $100.

WTI crude, daily since February 2026, with the monthly change in US CPI for June to September. The dashed line is the $90 level.

Which raises the question: what have stocks done when the Fed started hiking?

History

After the first hike, stocks zigzag

I took the first rate hike of each cycle: 1994, 1997, 1999, 2004, 2015 and 2022.

Then I followed the S&P 500 over the next 12 months.

The first three months were weak.

No cycle got through without a drop of at least 7% along the way.

The hardest was 2022: the low hit -16.5% within three months.

In 2015, the low came only on February 11th, 2016, with oil under $30 and fears about China.

In 1999, the low came on September 28th. Stocks kept climbing for six months after it, up to the March 2000 peak.

But look at the 12-month column in the table too: the S&P was higher in 5 of 6 cases.

Year	After 3 months	After 6 months	After 12 months	Low within 3 months
1994	-3.9%	-2.4%	+1.9%	-7.2%
1997	+12.7%	+18.9%	+39.6%	-7.0%
1999	-6.6%	+6.7%	+6.0%	-8.5%
2004	-2.3%	+6.4%	+4.4%	-7.0%
2015	-2.2%	+0.2%	+8.9%	-12.7%
2022	-15.9%	-11.1%	-9.1%	-16.5%

S&P 500, versus the close on the day of the first rate hike of a cycle. The last column is the lowest intraday point within the first three months.

5 of 6Cases in which, after three months, the S&P was below its level on the day of the first hike.

S&P 500, change versus the close on the day of the first rate hike of a cycle. The vertical line marks three months.

But the first hike is only the beginning.

The pace

What mattered was what came next

The first hike shows which way the Fed is heading. It doesn't say how far it will go.

In 2022, the Fed hiked 11 times in 16 months.

In 1997 there was a single hike, then a pause. The easiest year in the table.

In 1994, seven hikes in a year doubled the rate, from 3% to 6%.

Year	Hikes	Before	At the end
1994	7	3.00%	6.00%
1997	1	5.25%	5.50%
1999	6	4.75%	6.50%
2004	17	1.00%	5.25%
2015	9	0.25%	2.50%
2022	11	0.25%	5.50%

How many hikes the Fed made in each cycle and where the benchmark rate ended up. For 2015 and 2022 it's the top of the target range.

1 hikeHow many the Fed has made in the current cycle, as of October 14th.

And this year we start from a different place.

The difference

Why 2026 doesn't look like 2022, so far

One month after the hike, the S&P was at +3.4%.

The context is different.

In March 2022, US inflation had already passed 7%, and the Fed hiked aggressively.

Today inflation is 3.7%. These hikes come with a growing economy, not as an emergency brake.

That doesn't guarantee anything.

Both numbers stay true at once: three choppy months, a higher year.

On top of that, the stretch after October 26th, the best of the year, falls right inside these three months.

1 of 6Cycles in which the first month finished higher: 2022, with just +0.8%.

But the index isn't the whole picture.

The stocks

The index hides what happens underneath

The S&P is an average.

Individual stocks don't move like it does.

From the hike to October 13th, MicroStrategy rose 20.6% and PayPal 6.6%.

MARA and CleanSpark fell 17.5% and 20.6%, respectively.

On October 14th, the miners fell more than seven times as much as the index.

FuelCell shows the same thing in reverse: $20.65 on October 6th, $14.10 on the 14th.

That's almost a third lost in six sessions.

The lesson isn't about these companies. It's about size: stocks like these move far more than the index, in both directions.

+9.1%How much Bitcoin rose over the same stretch. The miners fell anyway.

Change from the close on September 16th to October 13th. The S&P 500 and five stocks from the portfolio.

That's where the positioning starts.

How we're positioned

The history above changes one thing for me: how deep I expect a dip to be.

A 7% drop from the October 6th high would take the S&P toward $7,300.

A dip that far would fit the pattern in the table.

That doesn't mean it's coming. It only means that, if it does, it isn't the first sign that something broke.

Conclusions

The Fed has started to hike.

Historically, three months of zigzag follow.

What to watch this week

Does the S&P stay above the $7,617 low of October 1st?
What does the Fed decide on October 28th: a pause or a second hike?
Does oil stay above $90 or drop below that level?

CPI came in hot. What did stocks do last time?

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