The stock market and bond prices go hand in hand. Whether it be changes in interest rates or alterations in the global economy, an understanding of the relationship between bond prices and stock market forex is essential for investors of all levels. In this article, we will explore the dynamics of the bond market and how it impacts the stock market, focusing on the factors that affect the prices of these two investments. Bond prices tend to move inversely to interest rates. So when interest rates rise, bond prices typically go down and vice versa.
The U.S. stock market in 2020 saw the biggest gains since 2013. The S&P 500 had its strongest annual return since 2013, gaining 16.3% for the year while the Dow Jones Industrial Average surged 7.2%. The tech heavy Nasdaq Composite index rose a staggering 43%, its largest annual gain since 2009. Technology stocks led the way, accounting for nearly 40% of the index’s increase. Overall, all 11 S&P 500 sectors recorded a gain for the year, a reflection of an economic recovery in 2021 that was both faster and stronger than expected.
