How will US stock market react to a possible near term rate hike

Stock market and rate hikes

How will US stock market react to a possible near term rate hike?The much anticipated speed of FED chairman Janel Yellen at Jackson Hole may provide some clues about how close is the FED to actually raise interest rates.If this happens economic theory implies that this is bad news for stocks as rate hikes lower the stocks valuation using a DCF approach.For now US stock market does not make any strong moves as we are still in summer mode.Maybe from September we will see more volatility which is both good and bad for stock trading.

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