A simple guide to the stock market... and why everyone is talking about it

President Trump's new tariffs on goods coming into the United States have had a global impact on the stock market... but what is the stock market?

The stock market is in the news right now, with big drops around the world following President Donald Trump's announcement of tariffs.

But what is the stock market, and how does it affect us all?

Read on for our simple explainer.

What is a 'stock exchange' and what is a 'share'?

Much like at a fruit market, prices of 'shares' can go up and down depending on how much people think they are worth.

The stock market, like any market, is where things are bought and sold.

In this case, the things for sale are companies themselves.

Most big businesses around the world are worth a huge amount of money, so they are divided up so people can buy a share of the company.

These are called, funnily enough, shares.

When people are feeling good about a company – maybe because it is selling a lot more games consoles than last year – more people want to buy shares in it.

That means that the price goes up, as people are willing to pay more for a share of a successful company.

And the opposite is true. If people are feeling bad about a company – maybe the new console it's selling is poor quality – then the share price goes down.

What makes share prices go up or down?

There is a statue of a young, fearless girl stood in front of the New York Stock Exchange. It was put there to symbolise how important it is to have a diverse range of people running the top companies in the world.

The stock market as a whole is made up of the prices of many thousands of companies, all around the world.

And at the moment, they are all going down.

That's because around the world, people who buy and sell shares for a living think that Donald Trump's plans on tariffs will make doing business more expensive. They think that businesses won't be as successful as they have been before.

Could this change prices in shops or affect jobs?

Shipping containers full of items to sell abroad get ready to leave the UK.

But why does the stock market going down matter? Well, if it goes back up again, then it doesn't.

But if it keeps going down, then it could be a problem. It's a sign that, around the world, people think there won't be as much money to be made as before.

And that can have a bigger effect.

Businesses could try to save money by closing factories, or by cutting jobs.

Donald Trump says that his tariffs will make Americans richer in the long run. But the longer that stock markets go down, the more likely it is that patience with his plans might start to run out.