How do interest rates impact the stock market?
The way that interest rates affect the stock market is really to do with the cost of capital. If interest rates start to go up, what that means is that a company is going to have to pay more money in order to get capital, so it's more expensive for them to do business. That's one way in which interest rates can directly affect the stock market and what might be happening with the company. There's some indirect effects that might be going on that increase interest rates, or a sign that we're going into an inflationary period that could also have a negative impact on the short term prices of stocks.