when the earliest stock markets formed the global economy was vastly different these were eras when trade and commerce were primarily driven by physical goods with industries like agriculture textiles and early manufacturing dominating the economic landscape stock markets at the time were fledgling institutions primarily helping to finance expeditions and trade ventures which is to say the colonial enterprises taking goods and peoples from south asia the americas and africa these stock exchanges were already global investment operations 7 yet they played a relatively minor role in everyday economic life 
fast forward to today and the stock market is considered central to the global economy a change underscored by financialization and the increasing dominance of financial markets and institutions this isn t just because over a million americans work in finance 8 modern economies are characterized by a complex web of financial transactions and instruments with the stock market not just a barometer for economic health but also seen as critical for distributing and creating wealth financialization has also mirrored broader socioeconomic changes today s stock markets are not just platforms for raising capital but have been tied into millions of americans retirement and investment strategies this is why at perilous times 2007 to 2008 and the pandemic being two major examples the u s government and federal reserve felt far more obligated than in previous eras to step in this was not just to protect the wealth of a select few but because the savings of a vast swath of americans were at risk not long ago americans hearing stock market news might be listening for indirect effects on their jobs say to see how their firm is doing but now they are doing so more often for the direct impact on their own portfolios including 401 k s of course many are paying off college mortgages and other debts or are otherwise too fragile financially to have a portfolio of stocks or other assets still they too feel the reach of the stock market and its effects first the market drives funding for technological advances like the smartphones in our pockets or the medications we take which require many billions of dollars for research and development this access to capital has been crucial for companies pushing into areas like artificial intelligence or new medical devices costing many times what a company could otherwise borrow moves in the stock market also affect the broader economy and by extension employment its performance can influence corporate decisions influencing job creation and the opposite as layoffs can boost a stock price expansion and overall economic growth a healthy stock market generally correlates with a more robust economy but it could also mean more capital in the hands of a wealthy few increasing the property values of once middle class areas in almost every major american city the stock market also indirectly influences public services and infrastructure pension funds a major part of government spending for employees at the local state and federal levels are significantly invested in the stock market the returns generated from these investments can influence the financial health of pension funds affecting the retirement security of millions of people beyond the many more individuals who don t have pensions and are invested in the market directly through 401 k s mutual funds and individual retirement accounts 