How Does Tapering Affect the Stock Market?

The quantitative easing measures adopted in the aftermath of the financial crisis of 2007-08 had a positive influence on stock and bond prices in the United States financial markets. As a result, investors were anxious about the impact of a possible decrease — or tapering — of these beneficial measures.
It’s difficult to determine exactly what impact tapering would have on the stock market since it’s only a theoretical possibility—never has it’s been properly implemented by central banks that implemented an economic boost fueled by QE. In the past, however, it was commonly assumed that once the Fed began to gradually reduce its economic stimulus, the stock market would suffer.