How does stock market drop affect the economy if it doesn't affect the corporations?
Companies don’t issue stocks once and for all. It’s one of their sources of financing. Even if a majority of stocks is traded on secondary market companies still routinely issue new stocks when they are in need of cash.
Stock owners may feel less wealthy if the stock values fall and hence they might spend less or postpone their consumption. People who were just to cash out, for example due to retirement, might decide to postpone that and lower their consumption until the market recovers. This is negative demand shock and it’s bad for the economy.
There is also reverse relationship. A stock price is basically derived from the discounted expected value of future profits that the company will earn. If the expected future profits are lower due to some economy wide problems stock market will pick on that. The causation there is exactly opposite - it’s not stock market that affects the economy it’s economy that affects the stock market. Often when policy makers talk about improving the stock market they actually talk about policies that affect companies profitability not about policies that target sellers and buyers on secondary market.


The above list is not exhaustive but it should give you some idea why there might be some relationship between how the economy and how the stock market is doing.