<p>The stock market is a platform where shares of companies, known as stocks, are bought and sold. It facilitates the trading of these financial instruments, enabling investors to purchase equity in companies and allowing businesses to raise capital.</p>

<h2>How It Works</h2>
<p>The stock market operates through exchanges, which are physical locations or electronic networks where stocks are traded. Here's a simplified breakdown of how it works:</p>
<ul>
  <li><strong>Issuance:</strong> A company sells shares of its stock to the public for the first time, known as an Initial Public Offering (IPO).</li>
  <li><strong>Trading:</strong> Investors buy and sell shares from each other on the stock market. The price of a stock fluctuates based on supply and demand.</li>
  <li><strong>Clearing and Settlement:</strong> After a trade is made, a clearinghouse ensures that the buyer's payment is received and the seller's shares are delivered.</li>
</ul>

<h2>Why It Matters</h2>
<p>The stock market plays a crucial role in the global economy. It provides a means for businesses to raise capital, which can be used for expansion, research and development, or other purposes. For investors, the stock market offers an opportunity to grow their wealth through capital appreciation and dividends. For instance, an investor who bought shares of a tech company in its early stages and held onto them for a decade could have seen their investment multiply significantly, illustrating the power of the stock market in creating wealth.</p>