Market sentiment refers to the overall attitude of investors toward a particular financial market or asset. It reflects how investors feel about the market's future direction, which can be influenced by news, economic indicators, and global events. Positive sentiment often leads to increased buying activity, while negative sentiment can result in selling pressure.
Understanding market sentiment is crucial for traders and investors, as it can impact stock prices and market trends. Tools like surveys, social media analysis, and market indicators help gauge sentiment. For example, the Consumer Confidence Index is one measure that reflects how optimistic or pessimistic consumers are about the economy.