← All videosTHE SHORT VERSION
Read the results and methods ↗

news sentiment / stock returns / quantitative research

Does News Sentiment Predict Stock Returns? We Tested 2.27M Company Days

Nvidia rose 24% after earnings, but buying the next morning’s open lost 1.4% by the close. We tested whether company news sentiment predicted returns after entry across 2.27 million company days and five holding periods.

See the actual return gaps, uncertainty, a separate news-change ranking test, and the limits of scoring older headlines with a 2026 classifier. These retrospective comparisons did not establish a reliable trading edge. Read the full results and methods in the article.

Transcript

0:00Nvidia jumped twenty-four percent after

0:02earnings. But if you bought

0:03at the next morning's open,

0:05you finished that day down

0:06one point four percent.

0:08The stock had already moved

0:09before your entry.

0:11Can news predict what happens

0:12after you buy?

0:13We tested that across millions

0:15of company days.

0:16Our archive had nearly nine

0:18and a half million deduplicated

0:20story and company matches across

0:21trading sessions. Each morning, we

0:24compared positive and negative news

0:25companies, then subtracted the market's

0:27price return over the same

0:29window. Each dot asks: did

0:31positive-news stocks beat negative-news stocks?

0:34We asked that after a

0:35day, a week, a month,

0:36a quarter, and a year.

0:38Four answers were too uncertain

0:40to call. The quarter looked

0:41more convincing: positive-news stocks finished

0:44about one percentage point behind.

0:46But checking five periods gives

0:47us more chances to find

0:48a pattern by luck.

0:50With this much uncertainty, the

0:51quarterly gap needed to reach

0:53about one point one eight

0:54percentage points. We measured just

0:56over one percentage point.

0:58It fell short.

0:59Extreme price moves mattered, too.

1:01Removing windows with a one-day

1:03rise over four hundred percent,

1:05or a fall over eighty

1:06percent, brought the next-session gap

1:08close to zero.

1:09Those moves can be real,

1:10so the main test kept

1:12them. Then we tested sudden

1:13changes and bursts of news.

1:15Both models ranked the same

1:17news-selected companies using recent prices;

1:19one also saw the news

1:21features. Across five hundred fifty

1:23paired daily cohorts, the measured

1:25average gap was near zero,

1:26with uncertainty stretching in both

1:28directions. It failed all four

1:30checks we set in advance.

1:32We built this classifier in

1:33twenty twenty-six, then used it

1:35to score older news.

1:37For most of those records,

1:38we used news-archive timestamps, rather

1:41than logs of our system

1:42receiving and scoring them at

1:43the time. We still need

1:45to test whether this setup

1:46makes money when run live.

1:48Read the full results and

1:49charts in the article.

Join the conversation

Loading conversation…