[gctwnl]

Because loans are generally a safer investment than stock (ownership) with more certain returns.

And when you can get good returns from loans (high interest) stock gets relatively less attractive and hence the stock prices drop to match again the risk versus reward equilibrium (cheaper stock means less money invested means less risk for the same returns like dividend or stock growth)

This is why stock prices react almost immediately to interest rises.

The key investment calculus is always risk versus reward.

Secondary: the cost of doing business also goes up.