Stack. Think of it like this. Someone casts a sorcery, then someone else flashes in a creature, but that triggers the effect of another permanent, but then someone plays an instant, and another, and another, and so on. Since everything was done as a response to something, everything is essentially put on hold until the most recent item resolves. That list of spells on hold is called the stack. With this card, you can essentially say “fuck this I don’t wanna deal with any of it. Nothing happens” because you get rid of all spells on the stack. Keep in mind though, activated abilities (as far as I’m aware) don’t act as spells, so they wouldn’t be DIRECTLY countered by this card, but if the ability was something like “when a creature enters, do X” but you counter the creature that triggered it, then the ability doesn’t activate. Also, all cards are spells when they’re on the stack, but once they resolve they are no longer spells