Stock prices rise or fall based on the balance between supply and demand in the market. When more investors want to buy a stock than sell it, the price goes up. When more people want to sell than buy, the price drops. This balance is influenced by several key factors.

Company performance is one of the main drivers. Strong earnings reports, revenue growth, and positive future guidance attract investors, pushing the price higher. On the other hand, weak results or negative news can lower investor confidence and cause a sell-off.

Economic conditions also play a major role. Factors like interest rates, inflation, and GDP growth affect how investors value companies. For example, lower interest rates often make stocks more attractive compared to bonds, leading to higher prices.

Market sentiment and investor psychology are equally powerful. News events, political uncertainty, or global crises can lead to fear or optimism, driving quick price movements. Speculation and rumours can also cause short-term volatility even if a company’s fundamentals remain unchanged.

External factors such as technological changes, competition, and government policies can impact a company’s outlook and, therefore, its stock price. In the end, stock prices fluctuate because they reflect collective investor expectations about a company’s future performance and the overall economic environment.

Stock prices rise or fall based on supply and demand, which are influenced by various economic, company, and market factors. When investors believe a company will perform well, demand for its shares increases, driving the price up. Conversely, if confidence drops, more investors sell, pushing prices down. Company earnings, management changes, and product performance play a major role in shaping sentiment. Broader economic conditions, such as inflation, interest rates, and employment data, also affect market direction. Global events, like political instability or technological shifts, can trigger sudden price swings. Additionally, investor psychology—fear and greed, often amplifies movements beyond fundamental values. In short, stock prices reflect how investors collectively interpret information about a company’s current performance and future potential within the broader economic environment.

Stock prices rise or fall based on the balance between supply and demand in the market. When more investors want to buy a stock than sell it, prices go up. Conversely, when selling pressure outweighs buying interest, prices fall. Several factors influence this movement, including company performance, earnings reports, economic data, and investor sentiment. News about interest rates, inflation, or political events can also affect market confidence. Positive developments like strong profits or product launches attract buyers, while bad news or uncertainty drives sales. In short, stock prices reflect how investors collectively perceive a company’s future potential, and this perception constantly shifts with changing market conditions, economic indicators, and global events.