Why stocks rise even after weak results — the psychology behind it 🧠📈

Markets trade on expectations, not emotions. When a company reports lower profits but still performs better than what investors feared, its stock often rallies. It’s not optimism over poor numbers — it’s relief that reality wasn’t as bad as imagined. This is called the “expectation vs. reality effect” — where prices move not on absolute performance, but on how results compare to what was already priced in. Simply put: stocks don’t move on good or bad news — they move on surprises.