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What is the impact of interest rates on the stock market?

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Professional Stocks and Forex trader with 4 years of experience.

Interest rates can significantly impact the stock market. When rates are low, borrowing costs decrease, encouraging spending and investment, potentially boosting stock prices. Conversely, higher rates can increase borrowing costs, affecting corporate profits and reducing consumer spending, potentially...
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Interest rates can significantly impact the stock market. When rates are low, borrowing costs decrease, encouraging spending and investment, potentially boosting stock prices. Conversely, higher rates can increase borrowing costs, affecting corporate profits and reducing consumer spending, potentially leading to lower stock prices. However, the relationship between interest rates and the stock market is complex and influenced by various economic factors.

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