No matter which investment market you are in, high returns must correspond to high risks, while low risks correspond to low returns. When the economy is positive, people are more inclined to invest in higher-risk financial products. When the economy is in a relatively sluggish period, investors will choose financial assets with hedging functions. So, what impact does the surge in commodities have on the stock market?

What impact does the surge in commodities have on the stock market?

Rising commodity prices will cause the producer price index to rise, leading to As corporate production costs rise, the estimated value of the company's stock will naturally decline. At the same time, the surge in commodities is expected to increase the inflation rate, and the substitution effect of bond investors will also increase. Changes in commodity prices will affect the stock market corresponding to changes in the stock prices of listed companies. Normally, a bear market in commodities is mostly a bull market in stocks.

Summary: Commodities are not only commodities but also financial products, with prices determined based on the futures market. Commodity prices are closely related to the real economy and affect all walks of life in various countries. A trend increase in commodity prices often means that the global economy is in an expansion channel.