Impact of Macroeconomics Variables on Stock Market Indices During the period 2010-2020

Abstract

The primary goal of this research is to look at the influence of numerous macroeconomic variables on stock market indexes, with a particular focus on the NASDAQ. The ARIMA model was utilized to observe the NASDAQ stock price time series and forecast future prices. By analysing data from 2010 to 2020, the research revealed the links between NASDAQ stock prices and macroeconomic factors such as the CPI, interest rates, inflation rates, and unemployment rates. Results indicated a pronounced negative linear relationship between unemployment rates and the NASDAQ closing price, whereas the relationships with other macroeconomic variables were more intricate. Additionally, residual analysis of the model confirmed its commendable fit to the data. The data sources for this study are all from Yahoo Finance and Federal Research Economic Data. The findings contribute to a deeper understanding of how macroeconomic conditions influence stock market behaviour and offer valuable insights for investors, policymakers, and economists. By carefully selecting the model, time frame, and transformation methods, the study presents a well-rounded view of the complex interplay between the stock market and the broader economy.