The article explains that stock prices are constantly changing, reflecting both company performance and overall market sentiment. Key to these fluctuations is the law of supply and demand, where prices rise when more investors want to buy than sell, and fall when sellers dominate. Factors such as trading volume, market liquidity, and company size also affect price changes. Company performance, including earnings and management effectiveness, directly influences stock values, while market sentiment can lead to rapid short-term price shifts.
Understanding stock price movements is essential for investors, as they reflect real-time investor sentiment and are influenced by various market forces and company performance.
Stock prices rise when demand exceeds supply, and fall when supply exceeds demand, driven by investor preferences and reactions to news.
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