The stock market is where people buy and sell tiny pieces of ownership in companies. When a company wants to raise money to grow, it can sell shares of stock, which are like slices of the company. If you own stock in a bakery, you own a small piece of that bakery. When the bakery does well and makes more money, your slice becomes more valuable. When it struggles, your slice loses value.

People trade these shares at organized exchanges like the New York Stock Exchange, where buyers and sellers meet (mostly through computers now) to agree on prices. The stock market refers to all these exchanges together, and to the overall system of buying and selling company shares.

Prices change constantly based on how well companies are doing and how many people want to buy or sell. If everyone thinks a toy company will sell millions of products next year, more people want to buy its stock, which drives the price up. If the company disappoints customers, people sell their shares, and the price drops.

Investors study companies carefully, trying to buy stock in businesses they believe will succeed. Some people invest for decades, letting their money grow slowly as good companies prosper. Others trade more frequently, but that's riskier. The stock market helps companies raise money to build new products and hire workers, while giving regular people a chance to benefit from economic growth, but it can also go down and cause losses.