Anyone who invests in stocks knows that the stock market is likely to change at any given time for a variety of different reasons. One factor for the stock market to change that many investors aren’t aware of is different news events across America. News events can have a huge impact on the stock market for a variety of reasons. That’s right, and the latest AMZN earnings report could cause their stocks to go down based on how the news covers it. Read on to find out how news events across American impact the stock market.
Breaking news can have an immediate effect on the market for several different reasons. The main reason is that breaking news doesn’t typically include much information about the scenario. It’s quick information that is meant to explain the very basics of what news reporters know about the breaking story. This is bad because it can cause any company across the country to look like it’s going in the wrong direction. It’s also commonly associated with alarm and panic. This feeling will cause shareholders to sell stocks because they fear what the future might hold. Anything that’s breaking news and involves a company or sector of the stock market can cause that sector or company to lose momentum and stock prices to go down.
Political news coverage goes a long way for how the stock market performs because politics shape America in more ways than one. More televised coverage, like the 2020 presidential debate between President Trump and Joe Biden, isn’t the only type of political coverage that can change the stock market’s landscape. Small town politics like mayors and state politics, like governors, can cause a shift in the stock market. This is because most politicians have different views about how they feel the country should be run, and these views will clash with different parts of the stock market.
For example, if a political candidate wins an election and decides that they don’t care about recycling or pollution, green companies like Tesla will see a drop in stock prices. On the opposite end, if the governor of California decides that the entire state has to convert their cars from gas-powered to electric, companies like Tesla will boom.
Technology companies are a huge part of the stock market and play a huge role in how the market goes up and down. News releases and news reports about new products are ways that these tech companies’ stock prices go up and down. If people like what they see on the news release of a new tech product and are excited about it, more investors will buy into the product causing the stock to rise. Tech companies hold a huge position in the overall stock market and are some of the main reasons why the market might make a sudden dip or rise over a short period of time.
When news agencies cover earnings reports, this coverage is one of the main reasons why a stock could immediately go up and down. Investors actually set reminders when the coverage for these earning reports happens because they know that they should buy in before the earning report or sell before it. It’s a great way to watch the market and see what the news coverage of an earnings report will entail.
Positive news versus negative news
In general, positive news about the country can cause the entire market to go up. Unfortunately, the same applies to negative news; it can easily cause the entire market to go down. According to Investopedia, many investors look for bad news to be reported because they know the market will go down, and they will be able to purchase stocks at a discounted price. They also sit and wait for good news to sell off their stocks and make a quick profit. Most of the time, when the news reports on a company or the entire country in general, their media ethics prevents them from worrying about the stock price of a company. This is how you know you can trust the negative or positive news that causes the market to rise or fall.