I get why a price of an individual stock goes up or down.
What I am trying to understand and I didn’t find on sub either is why some days a whole market can go wildly up or down at the same exact moment.
Is it just many people investing in a particular sector at once or some other factors?
Thank you in advance 🙂
In: Economics
Certain events affect every company. For example a general strike would result in all companies losing however many days’ production and therefore a certain amount of revenue and so value.
Also the fortunes of companies are tied to other companies. If the price of steel goes up then the profitability of selling steel widgets goes down. So people who sell steel widgets lose out. But so do all their suppliers, and all their customers, and maybe banks that have lent money to them, and so on.
Especially in situations where it is unclear what the long term affect will be (e.g the first weeks of a pandemic) it is reasonable to bet that every company might lose out. And that is what buying and selling stocks is; betting on the future value of companies.
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