What Drives the Stock Market?

One of the questions I probably get asked more than any other is why is the stock market behaving the way it is… especially over this last year. The last year has shown to be one of the wildest rides I’ve seen in the stock market over my lifetime. But its behavior through the pandemic can be explained. If you can understand what drives the stock market, you can explain its behavior from day to day and year to year, based on just a handful of factors. Read on to learn more.

Posted in Finance Explained, Investing Money, Money Tips and tagged economics, financial literacy, podcast, stocks

About Meghan

Meghan spent nearly a decade as a Financial Analyst, before spending the last 7+ as a SAHM to three little ones. She shares simple money tips for moms to help your family reach your financial goals by building a financial plan you can LIVE with! You can learn more about her background in finance, catch her daily on Instagram and Facebook, and her weekly live discussions in her community for Family Finance Moms.

View all posts by Meghan →

9 Comments

Weekly Market Review 5-10-2021 on May 10, 2021 at 3:29 pm

[…] Mid and long-term bond yields peaked at the start of April, before starting to soften over the last several weeks. Just that little bit of softening, mostly due to investors’ beliefs that the Fed will hold off on raising rates for now, which the Fed reaffirmed following its regularly scheduled FOMC meeting last week, takes some headwind pressure off the stock market. To better understand the relationship between interest rates and the stock market, check out What Drives the Stock Market? […]

This Week in the Market 5-17-2021 on May 17, 2021 at 7:52 pm

[…] Mid and long-term bond yields peaked at the start of April, before starting to soften over the last several weeks. Just that little bit of softening, mostly due to investors’ beliefs that the Fed will hold off on raising rates for now, which the Fed reaffirmed following its regularly scheduled FOMC meeting last week, takes some headwind pressure off the stock market. That sentiment changed this week, with the CPI report revealing solid year-over-year prices increases. To better understand the relationship between interest rates and the stock market, check out What Drives the Stock Market? […]

Weekly Market Summary 5-3-2021 on May 18, 2021 at 10:32 am

[…] Mid and long-term bond yields peaked at the start of April, before starting to soften over several weeks. Just that little bit of softening, mostly due to investors’ beliefs that the Fed will hold off on raising rates for now, which the Fed reaffirmed following its regularly scheduled FOMC meeting last week, gave the market room to run over the first few weeks of April. However, last week, interest rates began to increase again and stopped the stock market’s progress. To better understand the relationship between interest rates and the stock market, check out What Drives the Stock Market? […]

Monday Market Update 5-24-2021 on July 9, 2021 at 9:33 am

[…] Related Post: What Drives the Stock Market? […]

Monday Market Update 9-20-2021 on September 21, 2021 at 11:57 am

[…] general, raising taxes on corporations directly reduces future company earnings. Stocks trade based on expectations of future company earnings, so this proposal, if passed, would negatively impact trading values. Higher taxes on investment […]

Market Update 1-24-2022 on January 26, 2022 at 10:11 am

[…] To better understand this relationship between the stock market, company earnings, valuation ratios and interest rates, be sure to check out 5 Factors that Drive the Stock Market. […]

Market Update 1-31-2022 on February 3, 2022 at 10:16 am

[…] To better understand this relationship between the stock market, company earnings, valuation ratios and interest rates, be sure to check out 5 Factors that Drive the Stock Market. […]

Market Update 2-7-2022 on February 9, 2022 at 10:04 am

[…] To better understand this relationship between the stock market, company earnings, valuation ratios and interest rates, be sure to check out 5 Factors that Drive the Stock Market. […]

S3-2: Bear Market, the British Pound & A Deep Dive on A Estate and Will Planning on October 5, 2022 at 2:44 pm

[…] putting such downward pressure on the market? Recall the major drivers of stock market performance include interest rates and company earnings. The stock market is inversely correlated […]

Weekly Market Review 5-10-2021 on May 10, 2021 at 3:29 pm

[…] Mid and long-term bond yields peaked at the start of April, before starting to soften over the last several weeks. Just that little bit of softening, mostly due to investors’ beliefs that the Fed will hold off on raising rates for now, which the Fed reaffirmed following its regularly scheduled FOMC meeting last week, takes some headwind pressure off the stock market. To better understand the relationship between interest rates and the stock market, check out What Drives the Stock Market? […]

This Week in the Market 5-17-2021 on May 17, 2021 at 7:52 pm

[…] Mid and long-term bond yields peaked at the start of April, before starting to soften over the last several weeks. Just that little bit of softening, mostly due to investors’ beliefs that the Fed will hold off on raising rates for now, which the Fed reaffirmed following its regularly scheduled FOMC meeting last week, takes some headwind pressure off the stock market. That sentiment changed this week, with the CPI report revealing solid year-over-year prices increases. To better understand the relationship between interest rates and the stock market, check out What Drives the Stock Market? […]

Weekly Market Summary 5-3-2021 on May 18, 2021 at 10:32 am

[…] Mid and long-term bond yields peaked at the start of April, before starting to soften over several weeks. Just that little bit of softening, mostly due to investors’ beliefs that the Fed will hold off on raising rates for now, which the Fed reaffirmed following its regularly scheduled FOMC meeting last week, gave the market room to run over the first few weeks of April. However, last week, interest rates began to increase again and stopped the stock market’s progress. To better understand the relationship between interest rates and the stock market, check out What Drives the Stock Market? […]

Monday Market Update 5-24-2021 on July 9, 2021 at 9:33 am

[…] Related Post: What Drives the Stock Market? […]

Monday Market Update 9-20-2021 on September 21, 2021 at 11:57 am

[…] general, raising taxes on corporations directly reduces future company earnings. Stocks trade based on expectations of future company earnings, so this proposal, if passed, would negatively impact trading values. Higher taxes on investment […]

Market Update 1-24-2022 on January 26, 2022 at 10:11 am

[…] To better understand this relationship between the stock market, company earnings, valuation ratios and interest rates, be sure to check out 5 Factors that Drive the Stock Market. […]

Market Update 1-31-2022 on February 3, 2022 at 10:16 am

[…] To better understand this relationship between the stock market, company earnings, valuation ratios and interest rates, be sure to check out 5 Factors that Drive the Stock Market. […]

Market Update 2-7-2022 on February 9, 2022 at 10:04 am

[…] To better understand this relationship between the stock market, company earnings, valuation ratios and interest rates, be sure to check out 5 Factors that Drive the Stock Market. […]

S3-2: Bear Market, the British Pound & A Deep Dive on A Estate and Will Planning on October 5, 2022 at 2:44 pm

[…] putting such downward pressure on the market? Recall the major drivers of stock market performance include interest rates and company earnings. The stock market is inversely correlated […]

About Meghan

9 Comments

Leave a Comment Cancel Reply