The economy playing a role in moving of stock price what will go up and down. Below factors of economy are affecting of moving stock price:
Economic Outlook: Suppose, Economy is going to develop, rising in stock price may be seen, Because of fresh buying in that stock possible for future profit. Inversely, Economy looking like goes to poor side, we may see falling or selling in stock price.
Inflation and deflation are hot topics amongst economists.
Inflation: Inflation means rising general level of price of goods and services over time. On account of rising price goods & services, slows sales and reduces profits. Higher prices will also often lead to higher interest rates. For example, the RBI (Reserve bank of India) Ban is raising interest rates to slow down inflation. These changes will tend to bring down stock prices. On the other hand, commodities and some industries and companies can do better with inflation, so their prices of stock may rise.
Deflation: falling general level of price of goods and services over time, also making all held assets worth more in terms of purchasing power. Interest rates rise, so people borrow less and also waiting to buy goods & service in hope of that will drop more in price.
Other factors: changing into Big events in world or country affecting to the Economy and stock price such as Attack of Terrorism, which can lead to the market down side as crash and stock price fall. Also changing into macro field can affect to market.
Changes of government: A new government can make new policies. Sometimes these changes can be seen as good for business, and sometimes not such as 2009 election India had seen upper circuit in 1st time because of steady Government. Sometimes they may lead to changes in inflation and interest rates. These changes may affect stock prices.