What’s Up with the Stock Market?

Another day, another wild ride on Wall Street. Today, a number of tech companies reported their earnings, basically showing the world their cards following even more months of uncertainty. The results, it turns out, were mixed. Facebook’s parent company faired the worst, reporting declining revenue so disappointing that investors erased 25% of the company’s value in moments.

Here’s how it went down on CNBC:

As investors continue to adjust their portfolios in response to continued anxiety regarding COVID-19, a.k.a. the coronavirus, the stock market is swinging wildly. But why? The answer starts with the coronavirus, but it doesn’t end there. Meta’s plunge is a combination of disappointing revenues and an uncertain future consumer behavior.

If there’s one thing the stock market hates, it’s uncertainty.

In March of 2020, the floor of the New York Stock Exchange was filled with so much uncertainty that the S&P 500 fell by 7%. And 7% is more than just a large number. It’s the largest drop allowed before the “circuit breakers” flip on, requiring traders to take a breath for 15 minutes. Here’s how the freeze went down:

But COVID-19 wasn’t solely to blame. The crash was also a reaction to a major shift in the oil markets. That’s because the Saudis announced that they’d ramp up oil production — this while supplies of oil were already high. And if we know one thing about supply and demand, it’s that high supply and low demand make prices drop. For energy companies, the announcement was like hearing, “your assets are suddenly less valuable.”

Want another explanation? The Biz Kid$ hosts have the supply you demand:

For kids and teens seeking to understand what’s up with the stock market, the last 2 years of ups and downs are sure to be a interesting lesson. For more on the stock market, check out our entire episode, “What’s Up with the Stock Market.” Here’s a quick preview of the episode: artist Jeff Hanson.