Many believe that higher interest rates are a harbinger of bad times for the stock market. Recent market activity witnessing higher interest rates indicates a familiar correlation of rising interest rates and falling stock prices. Higher interest rates change the landscape. Risk-free rate assumptions: In the finance world, there’s much talk about the “risk-free” rate. This dynamic could wreak havoc on stock market prices since no one likes overpaying for anything (except maybe Veblen goods, but that’s another subject).

Source: Forbes May 26, 2021 11:37 UTC