$6 Trillion Cash Hoard Set to Boost U.S. Stock Gains Amid Fed's Pivot

A nearly $6 trillion cash hoard sitting on the sidelines could potentially fuel further gains in U.S. stocks as the Federal Reserve shifts its stance. Soaring yields have attracted cash into money market funds, but the Fed's recent dovish pivot may prompt investors to deploy cash into riskier assets like stocks. Historically, cash has returned an average of 4.5% following the last rate hike, while U.S. equities have surged by 24.3%. However, not all the cash in money market funds may be available for investment, and the size of money market assets relative to the stock market is smaller than in previous peaks.