Many catalysts can cause the trading volume to change. Factors range from general market-moving news and events to company-specific news. Some common factors can cause unusual volume, driving stock prices higher or lower:
Company-specific news: Material news from a company through an SEC filing or a press release can trigger robust and unusual volume spikes. Quarterly earnings reports and earnings guidance almost always cause the volume to change dramatically.
Economic news: Economic news events like GDP reports and interest rate changes can cause volume to surge. Government-issued economic reports like the consumer price index (CPI) can trigger strong, unusual stock volumes. Retail sales reports can impact the retail industry stocks. Home sales and new home start reports can impact homebuilder stocks.
Events: Scheduled and unscheduled events like a product launch or a developers' conference can cause volume to surge, especially if something unexpected occurs.
Analyst ratings: When analysts upgrade or downgrade a stock, it can change the sentiment and cause a volume swell in a stock. Large analyst firms and brokerages have a more significant impact than smaller boutique firms.
Hot trend: When a hot theme, segment or industry has much positive sentiment, it can cause unusual volume for stocks in sympathy. The metaverse rush, cloud computing and the artificial intelligence (AI) wave in 2023 caused many stocks to surge in sympathy with the AI trends.
Rumors: The possibility of a buyout or merger is a common rumor that can cause unusual volume. Rumors can be positive or negative and spawn heavy volume in either case.
Bear raids and short squeezes: It's not uncommon for a stock to get unusual volume as prices sink as a reaction to a bearish report or blog. Short seller firms have been brazen in issuing press releases and reports meant to cause panic selling stocks they have short positions in. However, stocks can also surge higher on extremely heavy volumes due to a short squeeze. This was a common theme during the meme stock mania of 2021.
Technical patterns: Sometimes a stock forms a strong technical pattern forming a breakout on no news but a strong chart pattern. Some of the most effective chart pattern breakouts can trigger volume surges as a breakout forms and accelerates.