The stock market is a complex trading network that many companies and people use. When people buy a business’s stock, they own a small part of that company and support its business. As the company demand increases, their stock is worth more, meaning they would gain money. At this time, some people choose to sell their shares, so they can earn money. Others will hold onto their shares, hoping that the company will continue to grow, they can then sell their shares and earn more money than before.
If the company were to face backlash or lose customers, their stocks would go down. Investors would then be losing money, as the stock is worth less than when they bought it. Now with a basic understanding of how the stock market works, why is it crashing?
When people say “The stock market is crashing!”, they are most likely referring to the sudden drop of stock prices. The stock market is most commonly used as an indicator of how well the economy is doing. The most common reason as to why the market is dropping is because of the 50% tariffs that President Trump has put against Canada’s steel and aluminum products. This, and a new 200% tariff that Trump has threatened to add to Canada’s European wine and champagne. Because of these tariffs, imported goods are now harder to come by, making the stocks drop as businesses are receiving less imported goods. The businesses most affected by these tariffs are automakers and auto parts suppliers.
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