Stock prices are determined in the marketplace, where seller supply meets buyer equilibrium. Generally, stock prices fluctuate by factors such as supply and demand, the company's performance and profitability, economic, and political factors, and market sentiment.

Supply and demand

Stock prices are driven by a variety of factors, but ultimately the price at any given moment is due to the supply and demand at that instant. Supply is the total amount of a specific stock that is available in a market, while demand is the total amount demanded in the market for that stock. Low supply and high demand will push up the stock prices, whereas high supply and low demand will produce a contrary result.

Corporate Prospects

The financial report: the disclosure of a company’s annual report, semi-annual report, and quarterly report often bring fluctuations to its stock prices because the reports contain the company's performance, profitability, and prospects of the company within a specific period. If the reports indicate that the company is performing well or that its sector is expected to grow, investors are more likely to purchase its stock shares, demand for its stock shares increases, and the stock prices rise accordingly.

Economics Factors

Interest rates are an important factor in determining stock prices. When interest rates fall, stock prices rise, as individuals spend more, which in turn leads to higher corporate profitability, and companies can finance operations, acquisitions, and expansions at lower borrowing costs, thus boosting their profit potential.

When interest rates increase, individual consumers may not consider buying goods with variable interest rates, such as houses and cars, and it will indirectly result in a decrease in corporate income. In the meantime, corporations reduce their loan amount from banks due to high borrowing costs, resulting in a decrease in spending and the slowdown of growth, hence a negative effect on their performance in the stock market.

International political and trade relations, natural disasters, and commodity prices also significantly impact stock prices.