The phrase Wall Street is very common in pop culture, and you’ve more than likely come across an article or movie that mentions it at some point. We’re taking you through what it means, and how its definition has evolved over time.
Well TDA, what is Wall Street exactly?
When we talk about Wall Street, we’re talking about the U.S.
It’s an actual street in New York that is home to the New York Stock Exchange (which is sort of a U.S. equivalent of the Australian Stock Exchange/ASX). The New York Stock Exchange (NYSE) is the largest stock exchange in the world. This is where investors can buy, sell, and trade stock (also known as shares). The NYSE still has a physical trading floor on Wall Street (you’ve probably seen photos of it), located on Wall Street. It is also home to some of the largest U.S. brokerages and investment banks.
The phrase ‘Wall Street’ has expanded in meaning
What we mean by that is Wall Street has become more of an umbrella term for all financial things in the U.S. For example, there is another prominent stock exchange in the U.S. called the Nasdaq Stock Market (NASDAQ). Both NASDAQ and the NYSE are very similar, but the main point of difference is location. NYSE is actually physically located on Wall Street, but NASDAQ is not (it’s online). However, both are considered ‘Wall Street’ as they are both massive stock exchanges, even though one is not actually located on the physical street.
‘Wall Street’ has become a phrase to include the powerful financial firms, institutions, banks, and stock exchanges within the U.S.
Wall Street vs Main Street
Let’s compare some definitions.
- Wall Street: As we know, a street in New York that is the financial epicentre – the home of the New York Stock Exchange. Also, a phrase used when talking about the powerful financial institutions in the U.S.
- Main Street: A term used to describe normal retail investors (people like you and me) who buy and sell shares
There are tensions between the two streets, as both have different goals and intentions. What can be beneficial to the more rich and powerful on Wall Street can at times hurt the retail investors on Main Street. Sometimes (but not usually) the other way round. Wall Street at times has also received bailouts for mistakes it’s made, but it was the retail investors who felt the consequences of those mistakes (think GFC). Of course, this is a simple explanation to a complex issue, but both Wall Street and Main Street certainly have a rivalry.