The macroeconomic variables effects on the U.S. Stock Market Index (S&P 500) / Mohammad Hikal Mohammad Salim

• Main Author: Mohammad Salim, Mohammad Hikal
• Format: Thesis
• Language: English
• Published: 2022
• Subjects: Macroeconomics; Stock price indexes. Stock quotations
• Online Access: https://ir.uitm.edu.my/id/eprint/96705/1/96705.pdf; https://ir.uitm.edu.my/id/eprint/96705/

The Standard & Poors 500 (S&P 500) stock market index is one of the stock market indices for the United States (US). The S&P 500 tracks the stocks of 500 large companies in the US stock market. A stock market index is key in determining whether or not the stock market of a country is in a bull or a bear market. However, there are a lot of variables that influence the stock market index. The study is conducted in order to determine The Macroeconomic Variables Effects on the U.S Stock Market Index (S&P 500). The macroeconomic variables that are included in the study in order to determine the effects of S&P 500 annual returns are the Annual Gross Domestic Product (GDP) Growth Rate of the U.S, Industrial Production Index (IPI) of the U.S, Inflation Rate of the U.S, US Dollar Index (USDX) and Unemployment Rate of the U.S. The period of the study is from the year of 2000 till the year 2020. The data that is used in the study is collected from secondary data source such as reputable website from macrotrends, Trading Economics, The World Bank, MarketWatch and Federal Reserve Economic Data (FRED). The model of the study that is used is time series model. The findings from the result of the study concluded that out of the five macroeconomic variables, there are only one that is significant and has a negative relationship which is inflation rate. Others such as Annual Gross Domestic Product (GDP) Growth Rate of the U.S, Industrial Production Index (IPI) of the U.S and unemployment rate are insignificant and has a negative relationship with the S&P 500 with an exception of IPI which has a positive relationship with the S&P 500.