Supply and demand explains how prices change, but not why buyers and sellers change their minds. Several forces shift how people feel about a company and its future.
Five forces to know
Expectations — Prices reflect what investors expect a company to earn in the future, not just what it earned last year. If those expectations change, prices move.
Earnings — When a company reports its financial results, investors compare them with what they expected. Better-than-expected results often lift sentiment; worse-than-expected results often hurt it.
News — A new product, a big contract, a lawsuit, a change in leadership or a scandal can all change how investors value the business.
Interest rates — When interest rates rise, borrowing costs more and alternative investments offer better returns, which can make shares less attractive. When rates fall, the reverse can happen.
The economy — Growth, inflation, jobs and government policy shape how much money people have and how confident they feel, which affects the whole market, not just one company.
| Force | Why it matters |
|---|---|
| Expectations | Prices reflect the future, not the past |
| Earnings | Actual results are compared with expectations |
| News | New information changes how the business is valued |
| Interest rates | They change borrowing costs and the appeal of alternatives |
| The economy | It affects overall demand, profits and confidence |
None of this makes prices predictable. The market is where millions of opinions meet, and any single piece of news can be read in different ways.
Supply, demand and price pressure
Prices move when the balance between willing buyers and willing sellers shifts. Explore how each side affects that balance.
Net pressure
+38.5%
Upward pressure
Strength of the tilt
38 / 100
How far the marker sits from the centre
Educational only