RBC Capital Markets: U.S. stocks can withstand two moderate interest rate hikes in the next 12 months.

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Lori Calvasina, Head of U.S. Equity Strategy at RBC Capital Markets, said that as long as the Federal Reserve’s tightening cycle remains moderate, the U.S. stock market should be able to withstand interest rate hikes.

“As long as there are about two rate hikes of 25 basis points each in the next 12 months, I think the stock market will ultimately be fine. The market seems able to withstand anything done moderately.”

Last week’s Federal Reserve policy meeting caught traders off guard, as the new Fed Chair, Kevin Walsh, made it clear that he would not tolerate high inflation.

However, U.S. stocks still posted gains for the second week in a row, making it the eleventh time in the past twelve weeks. Since hitting a low on March 30, 2026, the S&P 500 Index has risen 18%.

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