Stock market volatility is part of life as an investor, but understanding it can help you manage your expectations and plan for it. There are many factors that can cause volatility, such as economic data surprises, earnings announcements and global events.

When it comes to individual stocks, company performance can also drive volatility. This could include anything from a merger to a product launch, earnings reports or even changing leadership. It could be something more subtle, too. For example, a drought in a cocoa-producing country may make the commodity more scarce and boost prices—which can then ripple through the stock prices of public companies that sell or use cocoa products.

Seasonality can also impact stock prices. For instance, demand for certain consumer goods increases in the summer and fall, which can prompt a surge in production or sales of related products—which can then trigger a shift in stock prices.

Government policy changes can also influence markets, particularly when they occur quickly or unexpectedly. For example, a new tax law or an increase in interest rates can have different effects on the economy and stocks. The CBOE Volatility Index (VIX), often referred to as the fear gauge, is one way to track expected stock market volatility. It measures investors’ expectations for volatility over the next 30 days, based on options pricing. The VIX tends to rise when investors expect bigger price swings.