Federal Reserve rate hikes cool inflation by tightening financial conditions, which naturally creates headwinds for stocks rather than relief.

* Lower Valuations: Stock prices represent the discounted value of future earnings. Higher interest rates raise the discount rate, shrinking the present value of future corporate profits—hitting growth stocks hardest.

* Higher Capital Costs: Squeezed margins, higher debt servicing costs, and reduced consumer spending slow revenue growth across industries.

* Yield Competition: High yields on risk-free Treasuries and money market accounts lure capital away from equities.

* Recession Risk: Hikes signal that the Fed is actively dampening economic activity, fueling fears of a corporate earnings slump.

True stock market relief typically arrives only when the Fed pauses or cuts rates, signaling an easing of monetary policy.