In a repo, teh Fed drains short-term liquidity. In a revrese-repo, it offers short-term liquidity.
This helps banks in the short-term (1 to 3 days).

I am not sure how the mechanism works to funel liquidity from there to the stock market, but I believe that if a bank has more liquidity, it can also offer short-term credit lines to a few hedge funds or to its proprietary trading desks (if they still exist.)



Pascal