Stocks have rallied on rate hikes in 2022, but history suggests another reactionary spike is unlikely, says investment firm

After policymakers announce their next interest rate move at the Federal Reserve meeting on Wednesday, the S&P 500 could see a lackluster gain.

Since the Federal Open Market Committee raised the key interest rate by 75 basis points on June 15, the S&P 500 has gained 3.5%.

The S&P 500's direction is different than it has been in the past.

The Fed days in which the S&P 500 has been down more than 5% between meetings have usually seen stronger gains on the Fed day itself whereas gains have been more subdued when it heads into a meeting in the green.

The S&P 500 has rallied in the past due to the actions of the Fed. The S&P has risen on three of the last four Fed days.

Since 1994, those have been the strongest market reactions to the Fed. The 3% rally in May was the fifth best Fed day on record and the 2.24% rally in March was the tenth best.

The moves to the upside in response to the FOMC have been a sight to behold.

The Fed rate hike is expected to be 75 basis points, according to the FedWatch tool. The Fed funds rate could be anywhere from 2% to 2.5%. A key recession indicator for the Fed has warned that traders want the central bank to ease off on rate hikes.