The fixed income market is also known as the bond market, but is actually more comprehensive in nature since it incorporates all types of securities that yield a fixed stream of income. This would include short term notes or long term bonds that pay out a fixed coupon or interest payment. It also includes bank certificates of deposit (CDs) that pay a specified interest rate.

One can also think about the fixed income market as the yield on a bond or interest rate levels in general. The level of interest rates affects the stock market. Interest rates are relevant to the stock market from at least two perspectives.

First, the long term value of stock prices are determined by current interest rate levels. As interest rate levels rise, the long term value of the stock declines because the current value of the company is discounted by high interest rates. In contrast, when interest rate levels fall, the price of a company's stock increases in value because it is discounted by lower interest rates.

Second, stocks and bonds are alternative investment vehicles. Bonds are considered lower-risk investments because they tend to be less volatile than stocks in the short term. (In reality, they have a different set of risks associated with them than stocks.) When interest rates are rising, investors like to lock in a fixed rate of return. This means that some investors would sell stocks and buy bonds.