What Factors Contribute to a Rising Stock Price?


Quick Answer

Market forces such as supply and demand have a major impact on stock price, meaning that if many people want to buy shares of a certain company's stock, that stock price will very likely rise, as reported by Investopedia. Both low supply and high demand are likely to lead to higher stock prices. The more people who want a stock and are willing to pay any price for it, the smaller the supply will be.

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Full Answer

Investor sentiment also has a significant impact on rising stock price. If investors feel that a certain company is performing well and will continue to grow, that is likely to drive the stock price up because buyers are willing to pay more for shares. If a company is making a tremendous profit, that is likely to inspire buyer confidence. The daily rise and fall of stock markets is often related to how investors feel about the market and the economy as a whole.

Investors are not the only people who can have an impact on driving stock prices upwards. Central banks can move stock prices up or down by lowering or raising interest rates, according to U.S. News & World Report. Markets in growing economies whose GDP is rising may also experience stock price growth due to the general economic growth in that area.

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