Let's start from the fact that stock market fluctuations are correlated with changes in productivity growth. The bull markets of the 1920s, 1980s and 1990s were accompanied by rising productivity growth. And the bear markets of the 1970s and late 00s were associated with falling productivity growth. What's the causality here?
The conventional view is that a pick-up in the rate of technical progress leads both to firms adopting new technology and thus becoming more productive and to greater optimism about the future and hence to rising share prices.