Factors that affect a company’s stock price include fundamental factors, technical factors and market sentiment, reports Investopedia. Fundamental factors range from a company’s earnings-per-share or any type of valuation multiple, such as a price-to-earnings ratio.
Inflation, demographics, market strength and trends are technical factors that affect the price of stocks, explains Investopedia. Market sentiment is the psychology of stocks and how investors feel about the future of companies. Market sentiment is a subjective indicator, but it plays a critical role in the price of stocks. Long-term investors tend to use fundamental factors over technical factors, while short-term investors tend to rely on technical factors.