US Stock Market Terminology and Fundamental Concepts

New York, 11 December 2025: The United States is the world’s largest and most influential economy. An important component of this economy is the stock market. In America, the stock market is referred to as the Equity Market or Stock Exchange. Here, companies provide a platform for buying and selling their shares. The US stock market began in 1792 with the establishment of the New York Stock Exchange (NYSE), which remains the world’s largest stock exchange today. Daily transactions worth millions of dollars occur among individuals, institutions, and the government in this market.

In this article, we will explore in detail the fundamental terminology of the US stock market. These terms are extremely important for investors as they help in understanding the dynamics of the market. We will first discuss the major stock markets and indices, and then provide explanations of the common terminology.

The major stock market in the United States

There are two main stock markets in America, which are called Exchanges:

New York Stock Exchange (NYSE): This is the oldest and largest stock market in the world. Shares of major companies such as Coca-Cola, IBM, and Walmart are traded here. The NYSE is also referred to as the Big Board because hundreds of brokers gather on the trading floor.

NASDAQ: This is an electronic stock market, established in 1971. Here, shares of technology companies are traded extensively, such as Apple, Microsoft, and Amazon. NASDAQ is considered part of the Over-the-Counter Market because shares are traded on an electronic platform.

Both of these markets are regulated by a regulatory body called the Securities and Exchange Commission (SEC). The SEC is responsible for the transparency of the stock market in the United States.

Primary Indices

Stock indices are used to measure the health of the stock market. These indices are based on the average prices of shares of companies in the market. Some of the major indices in the United States are as follows:

Dow Jones Industrial Average (DJIA): This is the oldest index, existing since 1896. It includes 30 major American companies, such as Boeing and Goldman Sachs. The DJIA is commonly referred to as the Dow. Its calculation is based on average prices and represents the overall trend of the market.

S&P 500: This index includes 500 large companies and is the best reflection of the American economy. It consists of companies from various sectors, such as technology, healthcare and energy. The S&P 500 is called a Market-Cap Weighted index, meaning larger companies have more influence.

NASDAQ Composite: This is an index of all over 3,000 shares traded on NASDAQ. Its volatility is higher due to tech companies.

These indexes are updated daily during trading hours from 9:30 AM to 4:00 PM (Eastern Time). By 2025, the price of the S&P 500 is expected to rise above 5,000, influenced by changes in inflation and interest rates.

Common Stock Market Terminology

Many technical terms are used in the stock market in the United States. Some of the important terms and their explanations are as follows:

1. Basic Terms

• Stock or Share: A small portion of ownership in a company. When you purchase a share, you become a part-owner of that company.
• Bond: This is different from a share. It is a document issued to borrow money from a company or the government. It is referred to as a fixed-income security.
• Dividend: The portion of profit earned by a company that is distributed to shareholders as a return. For example, companies like Procter and Gamble provide annual dividends.
• IPO (Initial Public Offering): The process by which a company sells shares to the public for the first time. For example, in 2021, Rivian Automotive’s IPO was successful.

2. Trading Terminology

• Bull Market: A market in which share prices are increasing is called a bull market. In such a market, investors are optimistic.
• Bear Market: Conversely, when prices are falling, it is termed a bear market. This occurred during the COVID-19 pandemic in 2020.
• Volume: The number of shares traded on a given day. High volume indicates interest in the market.
• Market Capitalization: The total value of a company’s shares. For example, Apple’s market capitalization exceeds 3 trillion dollars.

3. Technical Analysis Terms

• Candlestick Chart: A visual representation of share prices. Green candlesticks indicate an increase, red candlesticks indicate a decrease.
• Moving Average: The average price over a past period. A 50-day or 200-day moving average is used to identify trends.
• P/E Ratio (Price-to-Earnings Ratio): The ratio of share price to earnings. A low P/E indicates that the share is inexpensive.

4. Risk and Regulation Terms

• Volatility: Fluctuations in prices. The VIX Index (Fear Index) measures volatility.
• Short Selling: Selling shares and then buying them back at a lower price. This is for those expecting a decline.
• Insider Trading: Trading based on inside information of the company, which is illegal under the SEC.

The Importance of Investment in the Stock Market

The stock market in the United States is a way for ordinary citizens to grow their wealth. Millions of Americans invest through retirement accounts such as the 401(k) Plan. By 2025, the stock market will have provided an average annual return of 7-10%, which will allow overcoming inflation. However, diversification is necessary considering the risks.

Conclusion

The term ‘stock market’ in America is not just a word but a whole ecosystem that functions like the beating heart of the economy. Terms like NYSE, NASDAQ, and DJIA are familiar to investors worldwide. For new investors, learning these terms is the first step. For more information, use the SEC website or platforms like Investopedia. Investing in the stock market is a long-term game – be patient and learn!

(Reference: Based on general knowledge and official SEC documents. Information as of 30 November 2025.)