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 compared to the previous trading session.
The market could be up in comparison to the previous day's closing level, previous week's closing level or even last year's closing level (year to date) The opposite phrase is the "market is down" or the "market is off."
What Moves Stock Prices?
BREAKING DOWN Market Is Up
Many factors can cause the market to be up. During earnings season, better-than-expected reports from a number of companies could firm up the market. 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 but Not All 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.