what does it mean by $2.9 trillion wiped away due to losses in Stock market. Where did it go?

Question

Where did the money actually go? Are these small startups or individuals that have gone bankrupt that totalled this amount ?

In: Economics

Answer 1

Stock price is a valuation of the worth of a company and of the expected ability to earn money in the future. If investors sell stocks because they think it might earn less in the future the prices fall. The 2.9 trillions are a reflection of how much expectations went down.