Using the data from Vietnam’s stock market from 2001 to 2023, the paper analyzed the effect of monetary policy on the stock market by applying the ARDL method. The findings revealed that, in the short term, the VNINDEX at its first lag and the rediscount interest rate are the two primary factors influencing the stock market’s growth. In the long run, all three variables including refinancing interest rate, rediscount interest rate, and CPI) have a significant effect on the VNINDEX, with respective coefficients of − 563.55, 235.69, and 4527.863. Based on the research findings and an analysis of Vietnam’s monetary policy management and stock market growth, the study provided some policy suggestions. The first is to transition from controlling the money supply to managing interest rates, and the second is to implement monetary policies that promote economic growth. For investors, the research offers detailed insights into how monetary policy actions, like interest rate adjustments, can influence the stock market. This information enables investors to better grasp the factors that drive market prices and trends, helping them make wiser investment choices, adjust strategies, and optimize asset allocation for improved returns.