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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 ↓
§ 01
AAPL — Today's Change, Trailing EPS, Revenue Growth. Open AAPL on the Ledge to see current values.
§ 02
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
§ 03

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.

§ 04
Look up any ticker and check the **News** section. Can you see how recent headlines might have moved the price?
§ 05
A company beats earnings expectations by 20%. What is the most likely short-term reaction?
§ 06

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.

Five questions · AI feedback

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:
See it on a real ticker →