What Drives the US Stock Market: An Empirical Analysis

Abstract

This study is conducted to check the asymmetric impact of the pandemic uncertainty (PUI), oil prices and uncertainty index (UI) on the large, mid and small capitalization of US Islamic stock market. The analysis is conducted for the time period of 18 years starting from 2002 to 2020 using auto-regressive distributive lags (ARDL) for exploring the nonlinear or asymmetric influence of variables on. The results suggested that oil prices (OP) did not significantly impact the Large, Mid and Small capitalization of US stock market. Whereas, the pandemic uncertainty have a significantly negative long term relationship with the Large, Mid and Small capitalization of US Islamic stock market. However, uncertainty index have a significantly positive long term relationship with the Large, Mid and Small capitalization of US stock market.