Which factor can negatively affect stock performance?

The influence of economic factors can significantly affect stock performance because economic conditions directly impact the overall market environment in which a company operates. Factors such as inflation, unemployment rates, interest rates, and economic growth or recession influence consumer spending, business investment, and overall demand for goods and services.

When economic conditions are unfavorable, a company's potential for profit can diminish, leading to decreased investor confidence and, consequently, a drop in stock prices. For instance, during a recession, companies may experience lower sales, which can adversely affect their earnings reports and thus their stock valuations. Investors are very attuned to these economic indicators, and negative shifts can lead to a sell-off in stock markets as confidence wanes.

In contrast, social media influence, strong marketing campaigns, and increased customer satisfaction typically foster positive perceptions about a company, potentially supporting or boosting stock prices rather than negatively affecting them.