Perhaps investors are right to cheer the first 50 basis point interest rate hike from the Federal Reserve since 2000, even if that seems like a counterintuitive reaction.

The S&P 500 went on to rally 7.3% on average in the twelve-months following 50 basis point rate hikes from the Federal Reserve between 1978 and 2000, according to data from LPL Financial's Ryan Detrick.

The largest gain over twelve months was after the Fed lifted rates by 50 basis points on February 1, 1995. The trend is not foolproof: The S&P 500 did lose 12.3% twelve months following a 50 basis point rate hike on May 16, 2000.

"Yes, 2000 and 1987 are in there, but there are also some really solid returns as well," Detrick noted.

The benchmark index gained an average 3.7% in the six months after a 50 a basis point rate increase.

And while Fed's latest move to curb inflation didn't surprise observers, market observers reacted to the subsequent comments by Federal Reserve Chairman Jerome Powell.

"A 75 basis point increase is not something the committee is actively considering," Federal Reserve Chairman Jerome Powell said in a post-rate decision press conference.

The comments sent markets ripping higher by the close of trading. The Dow Jones Industrial Average soared 932.27 points and the S&P 500 gained 2.99%, which was the largest gains for the two indices since 2000. Even the beaten-up Nasdaq Composite popped 3.19%.

"Powell gave a softer signal on being ready to go beyond neutral into restrictive territory than might have been expected and was optimistic about prospects for a soft landing," EvercoreISI's Krishna Guhu said. "All that is near-term very risk-friendly and delivered a sharp rebound in anxious and oversold markets."

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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