The first ting to realize is that there are a series of engineering type curves that describe the stock market and the economy. Superimposed on the prices of stocks is a speculative curve in which the market goes up and down along while averaging on a long term regression line regardless of the condition of the economy. These gyrations are not of great concern as long as there is not a high margin rate, although the long term investor would do well to buy at the low points.
A second element is interest rates. In about 1975 I walked in to Maryland Bank and Trust. There was sign on the wall notifying people that the interest on Certificates of Deposit was 23% and change. If you have $1,000,000 to invest, at that point you are better off to invest it in such high interest yields and get $230,000 per year sweating out starting a new substantive industrial business to get that return. Neither can you take a loan at high interest to start a business and hope to pay the cost of the loan by producing hard products at a price people can affor to pay. Thus, few new jobs are created. The basic economy weakens.
At the same time, people withdraw money from the stock market to put it where they can get 20% + yields. Thus, the stock market and the economy go down together for the same reason. During the period I mentioned the market declined to about 543. Some people assign a mystical predictive ability to the stock market for this reason.
In interest rate related deterioration, lowering interest rates changes the entire scene. At the present time interest rates are at a low, and hence the economic problems and stock market prices are lowering for entirely different reasons having to do with nearly purely the fundamental condition of the economy. These reasons have been discussed here and elsewhere and are more disturbing.
GDP is about 10 trillion...we're 22 trillion in debt???