1. Inflation: When inflation rises, the value of money decreases, which can lead to higher interest rates. Higher inflation often reduces corporate profits, affecting stock prices negatively. On the other hand, low inflation usually signals a stable economy, which can boost investor confidence and market performance.

2. Interest Rates: Central banks adjust interest rates to control the economy. Higher interest rates can make borrowing more expensive, slowing down economic activity and potentially leading to a drop in stock prices. Conversely, lower interest rates can encourage investment and spending, which may positively impact the stock market.

3. GDP Growth: GDP measures the health of an economy. Strong GDP growth typically leads to higher corporate earnings, which can drive stock prices up. On the other hand, if the economy is shrinking (negative GDP growth), it can signal an economic downturn, often resulting in lower stock prices.

4. Employment Levels: High employment rates generally reflect a healthy economy, with more people spending money and boosting business growth. A rise in unemployment, however, can dampen consumer spending, negatively impacting stock performance.

5. Investor Sentiment: Macroeconomic factors influence how investors feel about the market. For instance, concerns about inflation and rising interest rates can lead to pessimism, which can affect market dynamics and result in lower stock prices.