Interest Rates

• The Federal Reserve System through the Federal Open Market Committee raises or lowers the discount rate charged to banks as one of its primary monetary policy tools. To help boost the economy, rates are generally lowered; to control inflation concerns, rates are raised. Perception of the reasons behind the Fed move impacts whether a particular decision on a rate adjustment is good or bad for stocks. For example, higher rates generally mean companies have to pay more for financing. This means costs of growth increase, and perceived future growth potentials of stock decrease. Lower rates would conversely have a more positive effect on stocks.
  
  

Business and Market Scandals

• Stock investors are more apt to buy into stocks that have a positive sentiment on the stability and trustworthiness of the trading market and the broader business environment. In general, stock market scandals, such as deceptive mutual fund investing, along with major business scandals, like the infamous Enron accounting scandal at the start of the 21st century, lead to negative stock market results.
  
  

World Events

• Major political, economic or social world or domestic events are among the easiest to detect movers of the stock market. Historically, surprisingly disastrous global events such as 9/11 (in 2001), and the northeast Japan major earthquake and subsequent tsunamis of 2011, cause traders to sell more abruptly out of fear that the events will impact the business environment. When more upbeat global news comes out, such as announcements that wars have ended or progress has been made in political matter, stocks generally do better. In a March 2011 video interview with Bloomberg Television, fund manager James Moffett notes that during periods of ongoing negative events, such as with the political tension and rebellion in many parts of the Middle East in early 2011, investors are more desensitized and the news carries less weight as time goes on.
  
  

Technical Analysis

• Ironically, the study of historical trading charts for prediction of future market moves can itself impact the direction of the stock market. Technical chart analysis is derived from prominent models of stock market psychology, including the popular Elliott Wave Theory. This general idea is that stock investing plays out over time in predictable, psychological moves up and down. By detecting trading patterns through chart analysis, technical traders try to project the next move, or sequence of moves for a stock or the market as a whole. Investor response to this analysis can itself produce more buying or selling at targeted support and resistance levels. The result is sometimes short-term, but it can cause stocks to meet resistance on an uptrend, or to find support on a downtrend.