The stock market is the network of exchanges and OTC venues where shares of public companies trade — NYSE, NASDAQ in the US plus exchanges globally. Combined US equity market cap: $50+ trillion. Major indices: S&P 500 (large-cap), Russell 2000 (small-cap), NASDAQ 100 (tech-heavy), Dow Jones Industrial Average (30 industrials). The stock market is a discounting mechanism — prices reflect collective expectations about future cash flows. Long-term US stock returns: ~10% annually nominal, 7% real after inflation. Short-term volatility is extreme — annual returns can range -40% to +40%. The market is more volatile than the underlying businesses (Benjamin Graham's 'Mr. Market').
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Stock Market
August 22, 2026 · Aditya Gupta
Finance
Related terms
Bond Market
The bond market is the global market for debt securities — US Treasuries, corporate bonds, municipal bonds, mortgage-backed…
Bubble
An asset bubble is a sustained rise in asset prices well above fundamental value, driven by speculation rather…
Comparative Advantage
Comparative advantage is David Ricardo's foundational economic theory: countries should specialize in producing goods where they have the…
Consumer Price Index
The Consumer Price Index (CPI) is the most widely-cited inflation measure in the US — tracking price changes…
Cost of Capital
Cost of capital is the rate of return investors require to provide capital to a business — combining…
Deflation
Deflation is the sustained decline in general price levels — opposite of inflation. Sounds appealing (things get cheaper!)…
