Market expectations refer to the beliefs and predictions that investors and analysts have about future economic conditions, company performance, and market trends. These expectations can influence decisions related to buying or selling assets, as they reflect how individuals anticipate changes in factors like interest rates, inflation, and corporate earnings. When market expectations are high, investors may be more willing to take risks, leading to increased demand for stocks and other investments. Conversely, low expectations can result in cautious behavior, causing a decline in market activity. Understanding these expectations is crucial for making informed investment choices.