After the Federal Reserve raised interest rates in September 2026, CNBC Mad Money host Jim Cramer revisited how U.S. stock sectors performed during the central bank’s previous three tightening cycles. The historical record shows that sectors leading immediately after the first rate increase do not necessarily retain that advantage throughout the broader cycle, making it important to distinguish between the early months, the middle phase and the full period of monetary tightening.
The September move marked the Fed’s first rate increase since 2023. At the time, the central bank pointed to persistent inflation pressure, a resilient labor market and higher oil prices linked to conflict in the Middle East as key factors behind the policy shift. An oil-price shock driven by geopolitical events is different from the more traditional inflation generated by strong economic demand, creating an important distinction between the current cycle and earlier tightening periods.
Defensive sectors led after the 2015 rate hike
Cramer focused on the rate-hike cycle that ran from December 2015 through December 2018 and divided it into three stages. During the three months following the first increase, defensive sectors such as utilities, consumer staples and real estate ranked among the strongest performers. Investors favored industries with relatively stable cash flows and less sensitivity to the economic cycle.
The communication services sector also appeared near the top of the rankings, although Cramer noted that the result requires context. The communication services classification was introduced after the period under review, and the historical data largely reflects the performance of the telecommunications industry. In 2015, telecom stocks were generally viewed as defensive assets, which helped the group perform well after the initial rate increase.
Energy and materials strengthened in the middle phase
The picture changed when performance was measured from the first rate hike to the second, a period of roughly one year. Energy ranked among the strongest sectors, while materials also performed well. Healthcare, real estate and consumer staples moved into the weaker-performing group during that interval.
Cramer said inflation remained relatively moderate at the time, while concerns about an economic recession were limited. Financials and industrials consequently ranked among the better-performing sectors as well. Financial stocks often respond to expectations for higher interest rates, but their performance also depends on economic growth, credit conditions and investors’ assessment of recession risk. A single rate increase does not determine the outcome of an entire tightening cycle.
Technology led over the full three-year cycle
When the measurement period was extended across the full three years from 2015 to 2018, information technology became the standout sector. Consumer discretionary and financials also outperformed the broader market, reflecting the relative strength of cyclical and financial stocks while economic conditions remained resilient.
By contrast, communication services, consumer staples, energy and materials fell back in the rankings as the Federal Reserve gradually intensified its tightening campaign. The shift suggests that investors may initially seek defensive assets after rates begin to rise, then reassess their preferences as they weigh economic growth, corporate earnings and the likely duration of restrictive policy. That reassessment can redirect capital toward technology, financials or other cyclical sectors.
Cramer also cautioned that “every rate-hike cycle is different.” The point is particularly relevant to the current market. Historical sector performance can provide a framework for comparison, but it cannot replace an assessment of current inflation, employment, corporate earnings and commodity prices.
Oil prices add a different variable this time
One of the defining differences in the current tightening cycle is that the rise in oil prices has been driven more by war and geopolitical tensions than by broad-based growth in economic demand. Higher oil prices raise costs for companies and consumers and add to the Federal Reserve’s inflation challenge. Whether the shock persists, however, will depend on supply conditions, the course of the conflict and the subsequent path of energy prices.
Cramer said that if oil prices retreat toward roughly $80 a barrel, pressure for additional monetary tightening could ease. If the geopolitical shock fades relatively quickly, the ability of defensive sectors to lead in the early stage, as they did after the first 2015 hike, will still depend on how quickly oil prices decline and how investors revise their view of economic growth.
For equity and cryptocurrency markets, sector rotation affects more than traditional stock valuations. It can also influence broader investor appetite for risk assets. What is clear at this stage is that the Federal Reserve began its first rate-hike cycle since 2023 in September 2026. The subsequent policy path and relative performance of individual sectors will remain tied to inflation, employment data and movements in oil prices.