Individual stocks
A stock represents ownership in a company. Price can react to earnings, guidance, margins, competition, regulation, capital allocation and changes in valuation.
Indices
An index groups multiple companies under a defined methodology. S&P 500, Nasdaq-100 and Dow Jones Industrial Average can move differently because their constituent weights and sector exposures differ.
Macro drivers
- Interest rates and bond yields.
- Economic growth expectations.
- Corporate earnings.
- Sector rotation.
- Risk sentiment.
Earnings risk
Company earnings can cause sharp gaps outside normal trading hours. Traders should understand event risk before carrying leveraged positions through earnings.