Jim Cramer Highlights Sector Performance During Fed Rate Hikes

CNBC's Jim Cramer compared stock sector performances across three Federal Reserve rate hike cycles in recent weeks, shedding light on which segments gained dominance over time.

The analysis came shortly after the Fed raised rates for the first time since 2023 in September 2026, driven by persistent inflation, a strong labor market, and rising oil prices due to Middle East conflicts.

Cramer, host of Mad Money, examined three segments within the Fed's tightening cycle from December 2015 through December 2018. In the first three months after the initial rate hike, defensive sectors dominated the market.

He noted utilities, consumer staples, and real estate sectors delivered strong performance. While telecommunications services technically led in rankings, Cramer mentioned this figure could be misleading as the sector classification was introduced only by late 2018, reflecting historical telecom performance that investors then categorized as defensive assets.

Looking at the period roughly one year between the first and second rate hikes, conditions changed dramatically. Energy sectors performed best followed by materials, while healthcare, real estate, and consumer staples underperformed. Financials and industrials also ranked among top performers during this phase, attributed to low inflation and minimal recession concerns.

After three years, technology sectors dominated performance, with discretionary and financials showing strong results. This mirrors current strategist focus on cyclical and financial sector strength. Conversely, telecommunications services, consumer staples, energy, and materials fell to lower ranks due to the Fed's tightened policy.

Cramer noted this cycle differs from 2015-2018 as recent oil price surges triggered by war are adding pressure beyond broad economic demand seen previously. He added that if oil prices drop back to $80 per barrel, further tightening could halt. Whether defensive sectors will lead again like a decade ago depends on how quickly geopolitical tensions ease.