The Federal Reserve announces its next decision on 28 October. Most economists expect it to hold rates this month and raise them in December. That second part is what matters for anyone holding growth shares, because the companies whose profits sit furthest in the future are the ones that react most when borrowing gets dearer.
Where things stand
A Reuters poll reported this week found almost every economist surveyed expects a pause in October, with a rise to follow in December. Other headlines point the same way. Oil has climbed back towards $110 a barrel, which feeds straight into inflation, and US Treasury yields have held steady while traders wait for the next round of economic data. Gold has slipped for several days in a row towards $4,100 an ounce as the chance of higher rates rose.
None of that tells you what the Fed will do, and markets often move on the tone of the statement rather than the decision itself. It does tell you the question people are pricing: not whether rates fall, but how long they stay high.
Why rates move some shares more than others
A share is worth what its future profits are worth today. When rates rise, money in the future is worth less now, so a company expected to earn most of its profit in ten years loses more value than one earning steady cash today. That is why the same Fed meeting can hit a young software company hard and barely touch a discount retailer.
- Most sensitive: companies valued on growth far ahead, such as cloud software, quantum computing and space.
- Less sensitive: companies with cash today, such as energy producers and discount retailers.
- Mixed: the largest tech companies, which have both strong cash flows and high valuations.
How rate-sensitive portfolios have done
The table below reads the latest prices for a handful of our official portfolios, from the most rate-sensitive to the least. It updates every day, so it shows where they stand when you read this, not when it was written.
| Portfolio | 1 month | 3 months | 1 year | S&P 500, 1 year |
|---|---|---|---|---|
| US Cloud SaaS Index12 companies | +4.7% | +38.2% | −10.0% | +14.4% |
| AI Agents & Agentic Software Index10 companies | +5.1% | +34.7% | −5.5% | +14.4% |
| Quantum Computing Vanguard Index10 companies | −22.7% | −11.9% | −48.2% | +14.4% |
| Space Economy Infrastructure Index12 companies | −27.8% | −27.0% | −24.3% | +14.4% |
| US Big Tech Index10 companies | −2.1% | +4.5% | +16.0% | +14.4% |
| Off-Price & Discount Retail Index9 companies | +8.7% | +4.8% | +12.0% | +14.4% |
| US & Middle East Energy Index10 companies | +11.4% | +21.4% | +62.3% | +14.4% |
Prices up to 22 October 2026. Returns before each portfolio was made are simulated from real past prices, with no fees or taxes. Past performance is not a guide to the future.
As of 20 October the split was stark. Cloud software and AI agent portfolios had recovered strongly over three months after a weak year, while quantum computing and space were down double digits over the same stretch. The energy portfolio had beaten the S&P 500 by a wide margin over twelve months, helped by the oil price.
What to check in your own portfolio
- How much of it is in companies that do not make a profit yet. Those carry the most rate risk.
- How it did in 2022, the last year rates rose quickly. Every Arithmos backtest goes back ten years, so you can see it.
- Whether one theme dominates. Two growth themes that look different can still fall together when rates rise.
Arithmos is a research tool. Nothing here is a forecast of what the Fed will do or advice to buy or sell anything.
