What moves markets
Interest rates, inflation, jobs and earnings — the forces behind the headlines.
Markets move on expectations about the future. When investors think companies will earn more and the economy will grow, prices tend to rise; when they fear the opposite, prices fall. A handful of forces drive most of these expectations, and they are why the economic calendar matters so much.
Interest rates and the central bank
The most powerful force is interest rates, set by central banks like the US Federal Reserve. When rates rise, borrowing becomes more expensive, which tends to slow the economy and weigh on share prices; when rates fall, money is cheaper and markets often rally. This is why every word from the Fed is scrutinised so closely.
Inflation, jobs and growth
Central banks change rates mainly in response to inflation — how fast prices are rising — which is why reports like the Consumer Price Index (CPI) move markets. Employment data such as the monthly US jobs report signals how strong the economy is, and gross domestic product (GDP) measures overall growth. Strong data can be good news (a healthy economy) or bad news (it may force rates higher), which is why the reaction isn't always obvious.
Company earnings
Every quarter, listed companies report their profits. If results beat what analysts expected, the share price often jumps; if they disappoint, it can fall sharply — even if the company still made money. Our 'What to watch this week' box highlights the biggest upcoming data releases. Nothing here is financial advice.
