Changes in the interest rate generally affect the stock market rather than the other way around.
An increase in interest rates means an increase in the cost of borrowing, which is a business cost; this means lower profitability for producers, a decrease in funds borrowed for finance companies, and a decrease in sale of goods that require financing (autos, houses), etc.
Generally, then, there’s an inverse relationship between interest rate shifts and short-term stock performance.
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yes there is, if there is a functional financial market, the relationship through asset valuation, in short.
References :
Changes in the interest rate generally affect the stock market rather than the other way around.
An increase in interest rates means an increase in the cost of borrowing, which is a business cost; this means lower profitability for producers, a decrease in funds borrowed for finance companies, and a decrease in sale of goods that require financing (autos, houses), etc.
Generally, then, there’s an inverse relationship between interest rate shifts and short-term stock performance.
References :