Market Is Up: What it Means, How it Works, Example (2024)

What Does "Market Is Up" Mean?

The phrase "market is up" means the stock, bond, or commodity market, or an index representing them, currently trades higher than it did at some specific point in the past. Most of the time, financial media and individual investors refer to the stock market, saying it is up or down, they are comparing it to the previous trading session.

Often a follow-up usage of the term will coincide with a reference to the performance during the previous week, month, quarter, or year to date. The opposite of market is up would be "market is down" or "market is off".

Understanding the Phrase "Market Is Up"

When a given trading market (most frequently the U.S. Stock market) is being reported by financial media, this phrase will be used when, in comparison to the previous day's closing level, the reference price is higher. This could also refer to the previous week's closing level or even last year's closing level (year to date).

The opposite phrase is the market is down or, very commonly, the market is off by a given amount. For example, it is not unusual to hear a financial reporter say, "Dow Jones Industrial Average (DJIA) was off nearly one percent by today's close," meaning the closing price of the current day was nearly one percent lower than the close of the day before.

Many factors can be used to explain why the market is up for a given trading session, but in the end, the core driver of prices is the frequency and net volume of purchases or sales. If more people bought than sold, or if buyers bought at more rapid intervals than sellers throughout the trading session, then the market is likely to close higher. This dynamic usually happens because new information occurs in the market that modifies the valuations for assets that professional money managers are modeling.

Example

As an example, during earnings season, better-than-expected reports from a number of companies could increase the projected values of these companies. Analysts use pricing models which are updated instantly or soon after surprise news has been released. When such news disseminates, it likely, in turn, drives up the market.

Additionally, job reports can impact it, as can the federal funds rate set by the Federal Open Market Committee (FOMC). Since that rate is what the government charges banks to borrow from the Federal Reserve, any changes will impact interest rates throughout the economy. In general, the stock market rises when interest rates move lower because looser money means more consumer spending and business investment.

Indeed, it could be a change in investor attitudes following an election, a new product launch, or geopolitical calming.

When reporters say the market is up,they often mean that the Dow Jones Industrial Average (DJIA), an index of 30 key stocks traded on the New York Stock Exchange and the NASDAQ, is up. If the Dow closed at 22,800 on Monday and at 23,000 on Tuesday, the market would be up at Tuesday's close.

When the Market Is Up, Most Investors Make Money

An up market does not necessarily have a positive impact on all investors. For example, traders who own stocks can benefit when the stock market is up. However, bond traders may lose money because bonds often fall in value when stocks rise.

When the market is up broadly and for a long period of time, investors must face a decision about how to proceed. For example, in December 2017, the stock market was well into one of the longest bull markets on record. Should investors take some profits and reduce risk? Of course, that is an individual decision based on one's personal situation and risk profile.

In January 2018, the market finally began a long-awaited correction, falling by about 12% in just a few weeks' time. Investors already holding stocks for months or longer still believed the market was up for them. However, investors buying just ahead of the decline did not agree.The market being up depends on who you are and when you started.

Market Is Up: What it Means, How it Works, Example (2024)

FAQs

Market Is Up: What it Means, How it Works, Example? ›

When reporters say the market is up, they often mean that the Dow Jones Industrial Average (DJIA), an index of 30 key stocks traded on the New York Stock Exchange and the NASDAQ, is up. If the Dow closed at 22,800 on Monday and at 23,000 on Tuesday, the market would be up at Tuesday's close.

What is up market example? ›

upmarket | Business English

used to describe products and services that are of a high quality compared to others: The prices of upmarket tour operators are often discounted at the last minute. He had a plan to turn the properties into upmarket retail centers with high-end tenants.

What is the stock market but what is it and how does it work? ›

The stock market is a trading network that connects investors looking to buy and sell stocks and their derivatives. An easy way to think about think about the stock market is to consider it as a network of stock exchanges where traders and investors buy and sell shares of publicly traded companies.

What does it mean when the market is up points? ›

When you hear a stock has lost or gained X number of points, it's the same as saying the stock has lost or gained X number of dollars; one point equals one dollar. Since points represent actual dollar amounts, two stocks can rise or fall the same number of points—but register different percentage gains or losses.

What's a market and how does it work? ›

A market is any place where two or more parties can meet to engage in an economic transaction—even those that don't involve legal tender. A market transaction may include goods, services, information, currency, or any combination that passes from one party to another.

What does it mean if the market is up? ›

What Does "Market Is Up" Mean? The phrase "market is up" means the stock, bond, or commodity market, or an index representing them, currently trades higher than it did at some specific point in the past.

What is market with example? ›

A Market is any place where makers, distributors, or retailers sell, and consumers buy. Examples include shops, high streets, and websites. The term may also refer to the whole group of buyers for a good or service.

How do you make money on the stock market when it goes down? ›

Speculators short-sell to capitalize on a decline. Hedgers go short to protect gains or to minimize losses. Short selling can net the investor a decent profit in the short term when it's successful since stocks tend to lose value faster than they appreciate.

How do stocks actually make money? ›

The way you make money from stocks is by the selling them at a higher price than you bought them. For instance, if you bought a share of Apple stock at $200 and sold it when it reached $300, you would have made $100 (minus any taxes you'd have to pay on the money you made).

Who buys stocks when everyone is selling? ›

But there's one group of investors who charge in to buy when stocks are selling off: the corporate insiders. How do they do it? They have 2 key advantages over you and me that provide them the edge during uncertain times. If you follow their lead, you can have that edge too.

How do you know if the market is up or down? ›

You can identify an up-trend by spotting a series of bars with higher highs and higher lows. Similarly, a down-trend can be identified by a series of bars with lower highs and lower lows.

How to read S&P 500? ›

The price of the S&P 500 index that you see quoted – for example, 4,301.56 – is measured in points, not dollars. That's the weighted average value of all the index's components. As the component stocks move up or down, the index rises or falls according to the calculation.

What is the Dow Jones for dummies? ›

Short for Dow Jones Industrial Average, this market indicator consists of stocks belonging to 30 large publicly traded U.S companies chosen based on their quality and representation of major segments within the economy. It is widely considered a proxy for the overall stock market.

What the stock market really is and how it really works? ›

A stock market is a place where companies raise capital by selling shares of stock (also known as 'equity') to investors. Stock ownership gives shareholders voting rights and a residual claim on corporate earnings in the form of capital gains and dividends.

What is a market economy How does it work? ›

A market economy is an economic system where two forces, known as supply and demand, direct the production of goods and services. Market economies are not controlled by a central authority (like a government) and are instead based on voluntary exchange.

What is an example of a market system? ›

Countries like the United States, Japan, and the UK are examples of market economies. In these market economy countries, individuals own most of the resources. Their economies are not controlled or regulated by a central authority. Instead, the forces of demand and supply influence the core market activities.

What is the up market? ›

Upmarket products or services are expensive, of good quality, and intended to appeal to people in a high social class.

What are up and down markets? ›

Where in total, more shares are being bought than sold then the market as a whole will move up. This is because the individual share prices will have risen. On the other hand, where more shares in total are being sold than bought the market will move down as the share prices of those being sold fall lower.

What is the difference between up market and down market? ›

What is the difference between upmarket and downmarket? When a business moves upmarket, it changes its go-to-market strategy to appeal to larger, enterprise customers. On the contrary, moving downmarket means changing the GTM approach to expand to lower-income customers.

What is an example of up selling? ›

Upselling is a sales practice that's common in both business-to-business and business-to-consumer sales situations. Here are a few examples: An airline prompts a passenger flying coach to upgrade to a first-class seat as part of the airline check-in process.

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