Why do earnings and fed activity like CPI Reports and FOMC Meetings impact stock prices so much?

Question

Why do earnings and fed activity like CPI Reports and FOMC Meetings impact stock prices so much?

In: Economics

Answer 1

Because stock prices are impacted by a company’s revenue and profits, which are impacted by a company’s own performance as well as the overall performance of the economy.

Earnings show how the company did and how the company may be expected to do in the future.

CPI reports, FOMC meetings, etc. give indications about how the overall economy is doing, and how that might impact consumers’ and corporate spending.