Why Stock Prices Move

At the most basic level, a stock's price moves because of supply and demand: when more people want to buy a stock than sell it, the price rises; when more want to sell than buy, it falls. Everything else that affects a stock's price, like news, earnings, or sentiment, works by shifting how many people want to buy or sell.

Earnings reports, a company's regular public update on how much money it made, are one of the biggest price movers. If a company earns more than investors expected, demand for its shares often jumps and the price rises. If it earns less than expected, the price often falls, even if the company is still profitable overall.

Sentiment, the overall mood investors have about a stock, company, or the market as a whole, also moves prices, sometimes with little connection to any hard numbers. Optimism about the future can push a price up well ahead of actual results, and fear can push it down the same way, at least temporarily.

A company's regular public update on how much money it made, which often moves its stock price sharply, is called an ____ report.

What is the most basic force behind any stock price movement?

A stock's price can fall even if the company reported a profit, if that profit was lower than investors expected.