Economists "tend to see the stock market go up -- that is, do well -- when number one, the economy is growing and businesses are producing more and earning more and, importantly though, when the inflation rate is low," says Dr. Walden, a professor of agricultural and resource economics.

"Conversely we tend to see the stock market falter when inflation rises and the Federal Reserve steps in and perhaps increases interest rates in order to slow the rate of growth in inflation," he adds.

"Now the situation we are in today is ... almost ... the worst of both worlds. We have economic growth, but it is slowing. Inflation is not high by historical standards, but it is certainly higher than the Federal Reserve would want," Walden says. "And so the Federal Reserve has been placed in the position of perhaps wanting to lower interest rates in order to boost economic growth but not wanting to lower interest rates because they are afraid of inflation.

"And I think this is almost [changing on] a day-to-day basis, where investors think the Fed is going to move: Are they going to try to increase economic growth? Or are they going to try to reduce inflation? I think that's why we've been seeing this seesaw pattern on the stock market."