Macroeconomic Indicators and Market Dynamics: The Influence of US Real GDP on Sector-Specific Capitalization in the S&P 500

Abstract

Macroeconomic indicators serve as critical tools for assessing economic health and guiding investment strategies. Among these, the Real Gross Domestic Product (Real GDP) holds paramount significance as a measure of a nation's economic performance. This study explores the relationship between the Real GDP of the United States and sector-specific capitalization within the S&P 500 index. Utilizing historical data, the research investigates how fluctuations in Real GDP influence sectoral performance, offering a nuanced understanding of market dynamics. Employing statistical analyses, the paper highlights key trends, correlations, and causations, providing actionable insights for investors and policymakers. The findings underscore the pivotal role of macroeconomic health in shaping equity market behaviors.