How to Read a Market Headline
Index points, percentages, record highs and worst-day comparisons all sound dramatic; knowing how the major indexes are built puts them in proportion.
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Understanding Market Volatility
Volatility measures how much prices move, not whether money has been lost; knowing what drives it and what the common terms mean makes it easier to bear.
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Inflation and Purchasing Power
What inflation measures, how it is tracked, why the difference between real and nominal figures matters, and how to plan for spending in future dollars.
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Interest Rates Explained: How Rate Changes Reach Your Wallet
How a central bank's policy rate differs from market rates, and how rate changes generally flow through to savings yields, loans, bond prices, and stock valuations.
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Key Terms
Words You Will Meet
Short definitions from the glossary for this topic.
Open the full glossary- Basis point
- One hundredth of a percentage point. Interest rates and fees are often quoted in basis points because small differences matter when applied to large sums or long periods.
- Bear market
- A sustained decline in prices, conventionally described as a fall of twenty percent or more from a recent high. Bear markets are a recurring feature of investing rather than an exception to it.
- Bull market
- A sustained period of rising prices, usually accompanied by broad investor confidence. Bull markets can last for years and are typically identified only after they are well under way.
- Correction
- A decline in prices from a recent high that is sharper than everyday fluctuation but short of a bear market, conventionally around ten percent. Corrections are common and often brief.
- Credit spread
- The extra yield investors demand to hold a corporate or other non-government bond instead of a Treasury of similar maturity. Widening spreads signal rising concern about borrowers' ability to repay.
- Federal funds rate
- The interest rate at which banks lend reserves to one another overnight, and the main policy rate set by the Federal Reserve. Many short-term borrowing and savings rates move in step with it.
- Gross domestic product (GDP)
- The total value of goods and services produced in an economy over a period, usually a quarter or a year. Its growth rate is the most widely used summary of whether an economy is expanding or contracting.
- Index
- A rules-based measure of a market or a segment of it, built from a defined list of securities. Indexes are used both to track performance and as the blueprint for index funds.
Articles are general financial education, not individualized investment, tax, or legal advice. Read our important disclosures.