Learn · Markets·1 min read·
Why Do Rates Affect Stock Prices?
The link between rates, discounting, and the companies whose value sits furthest in the future.
Rates affect stocks through the discount rate applied to future cash flows. The effect is not a rule that every stock falls together; it is a change in the price investors are willing to pay for future outcomes.
Why growth stocks feel it first
When more of a company’s value depends on distant earnings, a higher discount rate can have a larger effect on its present value.
That is one reason valuation questions like why PER matters belong in the same conversation as markets.
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