Market Reaction

Market reaction refers to how investors respond to news, events, or changes in economic conditions that impact financial markets. When something significant occurs, such as a company's earnings report, government policy changes, or global events, investors buy or sell assets like stocks or bonds based on their expectations for the future. This collective behavior can cause prices to rise or fall quickly. Essentially, market reaction is the immediate response of buyers and sellers to new information, reflecting their sentiments and beliefs about the value of investments.