What moves the stock market

Stock prices move when buyers and sellers change what they think companies are worth. The things that change that view most often are company earnings, interest rates, economic data such as jobs and inflation, oil prices and world events, how easily companies can borrow, and how much risk investors want to take.

On any given day, one or two of these usually matter far more than the rest. The skill is knowing which ones are running. That is what the market forces pages track.

Most US listed companies report their results every quarter. A report moves the share price when profits or sales land above or below what investors expected. What the company says about the coming months often matters as much as the result itself.

When the largest companies report, they can move the whole index, because they make up a big share of it. That is why markets tend to be busier during earnings season.

The Federal Reserve sets the target for the main short term interest rate in the US. Its rate setting committee holds eight regularly scheduled meetings a year, and other meetings as needed. Each decision, and every hint about the next one, can move the whole market.

Higher rates tend to weigh on stocks for two plain reasons:

• Borrowing costs more, so companies that rely on debt keep less of what they earn.
• Safe savings and bonds pay more, so a profit promised years from now is worth less today. That hits fast growing companies and property owners hardest.

Falling rates work the other way. See rising interest rates, falling interest rates and rising yields pressuring real estate.

The US Bureau of Labor Statistics publishes a jobs report and a consumer price report every month. These shape what the Federal Reserve is likely to do next, so they can move stocks on the morning they come out.

A strong jobs number can lift stocks because the economy looks healthy, or push them down because it makes rate cuts less likely. Which one wins depends on what investors are worried about at the time. The macro events calendar shows what is due and why it matters.

Oil feeds into almost every cost in the economy. A supply disruption lifts energy producers and squeezes airlines and other companies that burn fuel. Conflict and political tension raise demand for defence companies and for gold, which investors treat as a safe place to wait.

See oil supply disruption, geopolitical risk and gold safe-haven demand.

When lenders get nervous, they charge more or lend less. Banks, heavily indebted companies and anyone who has to refinance soon feel it first. When conditions ease, the same groups get relief. See tightening credit conditions and easing credit conditions.

Sometimes one wave of spending carries a whole group of companies. The current example is the money going into artificial intelligence: data centres, chips, memory, power and the cloud software that runs on them. See the AI buildout.

Some days investors reach for growth and smaller companies. Other days they move into steadier businesses and cash. This swing often explains why the market rises or falls broadly even when there is no single headline. See growth stock rotation, growth stocks selling off and improving risk appetite.

Prices already reflect what most people expect. News that was widely expected is often already in the price, so the market moves on the surprise: the gap between what happened and what was expected.

This is why a company can report record profits and still fall, and why a rate cut that everyone saw coming can leave the market flat.

Decifer publishes a free daily read that says what moved, why it moved, and what is coming next, in plain English. You can read it on the site or get it by email each evening.

• Today: what moved and why, refreshed through the trading day.
• Daily reads: every day's read, kept at its own address.
• Stories: the individual news stories behind the moves.
• Market forces: which of the forces above is running right now.