Trump’s fake news and stock market returns

Siganos, Antonios

Abstract

We use a novel database that identifies allegedly Donald Trump’s fake news during his presidency. We find that the number of daily fake news is positively related to contemporaneous US stock market returns. Fake news is typically positively biased in our context, increasing stock returns in the short term. We invalidate alternate explanations of the main relation, such as the notion that newly arrived information drives the relation. The mechanism of the relationship is the source used and the reliability of the fake news. Fake news matters to the extent that participants believe it is true. This positive relation reverses over the following days, indicating some evidence of correction. Overall, we find that a politician’s fake news influences financial markets temporarily

Citation

Siganos, A. (online). Trump’s fake news and stock market returns. European Journal of Finance, https://doi.org/10.1080/1351847X.2024.2395927

• Journal Article Type: Article
• Acceptance Date: Aug 14, 2024
• Online Publication Date: Aug 27, 2024
• Deposit Date: Aug 22, 2024
• Publicly Available Date: Aug 27, 2024
• Print ISSN: 1351-847X
• Electronic ISSN: 1466-4364
• Publisher: Routledge
• Peer Reviewed: Peer Reviewed
• DOI: https://doi.org/10.1080/1351847X.2024.2395927
• Keywords: Politics; Financial Markets; Fake News; Stock Market Returns; Donald Trump