My understanding is that when there is a higher demand for a stock than its supply, the price goes up. In another words, there are more people who pay (or are willing to pay) a higher price for a stock than it sells for. Now my confusion lies in how the market as a whole influences individual stocks. When SPY has a 2% increase and then 1% decrease within the span of an hour, how is it that the majority of stocks in entirely different sectors have a similar pattern (at least what I’ve noticed anecdotally). How are people’s sentiment of each individual stock more or less the same as the whole (SPY) when each stock has a different valuation and presumably different reasons for price fluctuation?
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