How Do Changing Interest Rates Affect the Stock Market?
• Interest rates significantly influence stock market performance by altering borrowing costs, consumer spending patterns, and the valuation of future corporate earnings. • Investors closely monitor the Federal Reserve's policy decisions and the 10-year U.S. Treasury note to gauge the outlook for stocks and bonds. • This relationship matters because rising rates typically increase bond yields, making fixed-income assets more attractive relative to equities.
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