The stock market can be a wild place where you either know what you are doing and can make money year over year growing your wealth or a place where you can quickly become lost and lose your money fast. The stock market contains risk and the potential for great financial reward, and for those who play the game, it is critical to understand what the market is and what drives it to move. 

What the stock market actually is:  
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The first step toward mastering the stock market is understanding what it really is. At its core, the stock market is simply a digital marketplace where investors can buy and sell small parts of the ownership of publicly traded companies (buy and sell shares of stock).

When someone purchases a stock, they are actually buying a small part of that company and become one of the many owners of the company. 

This ownership can come with benefits like being able to gain from increases in value of that ownership (capital appreciation) as well as payments that companies sometimes make to investors as a reward for being owners (dividends). 

​Company founders originally sell off some of the company ownership to raise money and support their business activities. When a company is first publicly traded in an IPO (initial public offering), the shares of ownership of that company are available for the public to buy and sell in the stock market. 

What drives the market to move: 

​There are a couple of primary reasons that an individual stock or the market as a whole will move. One is that the stock, or the market as a whole (the market being a conglomeration of many individual stocks) will increase in value. An increase in value simply means that investors are willing to pay more for the ownership of that company. 
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​Value can increase in a lot of ways such as if the company begins selling more of its goods and services, if it is able to enter new markets, increase its profitability, or if it is in an industry where people are beginning to spend more money. 
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​The overall market value can increase in times where the economy is expected to become 'better'. A strong economy means that companies can raise money, everyday people have more money to spend, and money can quickly move hands in large quantities. This is good for the market because it means that companies can make more money as their customers are spending more money. This is why economic indicators such as GDP, inflation, and unemployment are closely related to movement in the stock market as a whole. 
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​For example, the Federal Reserve just announced that they are decreasing interest rates by 50 basis points, meaning that loans will be cheaper and more money will be available throughout the economy. The stock market's response to this was to open almost 100 points higher at the open, and is now above recent resistance levels. Take a look at the SPX chart to see the impacts of the FED announcement on the overall market this morning.