Last week, rivals Charles Schwab Corp, TD Ameritrade and E*Trade Financial also stopped charging commissions on online trades.
Since then, Charles Schwab shares have fallen nearly 4%, Ameritrade 1.4%, while E*Trade has risen nearly 6%.
Newer rivals such as Menlo Park, California-based startup brokerage Robinhood have been capturing market share in recent years by offering commission-free stock trades, forcing traditional brokerages to follow suit.
The firms are able to offer the free trading by pushing their customers' orders to so-called wholesale market makers, such as Citadel Securities and Virtu Financial, which aim to make a profit on the spread between the bid and the offer on the shares.
Fidelity said the change will take effect on Thursday for individual investors and Nov. 4 for investment advisers.
(Reporting by C Nivedita in Bengaluru; Editing by Saumyadeb Chakrabarty)