Skip to main content Skip to main content
Not investment advice. Educational reading. See Disclaimer.
L.6 · BEGINNER · 2 MIN

What Moves Stock Prices?

Stock prices change every second during market hours. Understanding what drives these changes is the foundation of investing.

Quiz · 5 questions ↓

Live data

AAPL — Today's Change, Trailing EPS, Revenue Growth. Open AAPL on the Ledge to see current values.

Compare

DriverEffect on PriceExample
Earnings reportsBeat expectations = up, miss = downCompany reports $2 EPS vs $1.50 expected
Interest ratesRates up = stocks down (usually)Fed raises rates, borrowing costs increase
Industry newsSector-wide movesNew regulation affects all banks
Investor sentimentFear sells, greed buysMarket panic during a crisis

Key point

In the short term, prices are driven by emotion and news. In the long term, prices follow earnings growth. That distinction separates investing from trading.

Try it

Look up any ticker and check the **News** section. Can you see how recent headlines might have moved the price?

Check-in

A company beats earnings expectations by 20%. What is the most likely short-term reaction?

Key insight

Price = what the market thinks a company is worth right now. Value = what the company is actually worth. The gap between them is where opportunity lives.

Check your understanding

Sit with the ideas.

A company reports earnings of $2.00 per share when analysts expected $1.80. The stock drops 5% the next day. What is the most likely explanation?

Why:
Continue this lesson in the app →See it on a real ticker →