Many companies featured on Money advertise with us. Opinions are our own, but compensation and
in-depth research may determine where and how companies appear. Learn more about how we make money.

By:
Editor:
Published: May 31, 2023 4 min read

Money is not a client of any investment adviser featured on this page. The information provided on this page is for educational purposes only and is not intended as investment advice. Money does not offer advisory services.

Photo collage of a hand holding a smartphone with the Twitter logo and stock graphs in the background
Money; Shutterstock

Can social media chatter predict stock market returns?

A recent research paper from four economists at the Federal Reserve says yes.

Using data from 4.4 million tweets posted since 2007, the researchers created the Twitter Financial Sentiment Index to track sentiment — whether users are feeling positively or negatively about financial conditions — on the social media network. They found that the tone of tweets overnight (between the hours of 4 p.m. and 9 a.m. Eastern Standard Time) could be used to forecast the S&P 500 index’s returns the following day.