An Empirical Analysis of Behavioral Biases in Stock Market Reactions to Macroeconomic Announcements: Evidence from the U.S. Economy

Taylor Wright; Ashley Mitchell; Avery Green; Ella Wood

Authors

Taylor Wright PhD
Ashley Mitchell Associate Professor
Avery Green Professor
Ella Wood Dr. Sc

Keywords:

Behavioral Finance, Macroeconomic Announcements, Stock Market Reactions, Investor Psychology, Market Efficiency, U.S. Economy, Cognitive Biases, Efficacy of Predictions

Abstract

This study investigates the impact of behavioral biases on stock market responses to macroeconomic announcements in the United States. By employing a comprehensive dataset spanning the last decade, we utilize advanced econometric techniques to analyze the reaction patterns of stock prices against various macroeconomic indicators. Our findings reveal significant deviations from rational market hypothesis, with notable prevalence of over-reaction and under-reaction phenomena. This research contributes to the understanding of investor psychology and its implications for market efficiency, highlighting the need for enhanced predictive models that incorporate behavioral finance theories. The analysis provides critical insights for policymakers and investors aiming to navigate the complexities of economic announcements.

Author Biographies

Taylor Wright, PhD

PhD
University of Mannheim
L 5, 1, 68131 Mannheim, Germany

Ashley Mitchell, Associate Professor

Associate Professor
University of Toronto
27 King's College Cir, Toronto, ON M5S 1A1, Canada

Avery Green, Professor

Professor
University of Sydney
Camperdown NSW 2006, Australia

Ella Wood, Dr. Sc

Dr. Sc
London School of Economics and Political Science
Houghton St, London WC2A 2AE, United Kingdom

References

Dimen, L., Huseynova, K., Muhammadali, A., Huseynova, A., Aslanov, E., Hajiyeva, N., & Nuta, A. C. (2026). The Relationship Between Energy Dependency, Energy Diversification, and Economic Growth: Assessing Energy Resilience in Europe. Energies, 19(7), 1723.

Huseynova, K., Hajiyeva, S., Nazarov, V., Habibova, Z., Guliyev, R., Valiyeva, K., & Teymurlu, R. (2026). DOES EMPLOYMENT STRuCTuRE DRIVE TRADE IN SERVICES AND FINANCIAL SERVICE ExPORTS?.

Huseynova, K., Habibova, Z., Quliyev, M. Ü. Ş. F. İ. Q., & Guluzade, F. (2026). Digital Transformation of Public Services: The Experience of Implementing E-Government in Different Regions. Law, State and Telecommunications Review, 31(2).

Rasif, R. E. (2010). BASE PRINCIPAL OF MANAGING OF NETWORK SOFTWARE SECURITY BY VULNERABILITIES DETERMINATION MODEL. Computer Science & Telecommunications, 28(5).

Рагимов, Э. Р. (2010). Выявление уязвимостей и выбоp пpогpаммного обеспечения для системы защиты инфоpмации коpпоpативных сетей. Телекоммуникации, (1), 46-48.

Алгулиев, P. М., & Pагимов, Э. P. (2006). Синтез аpхитектуpы защищенной коpпоpативной сети. Телекоммуникации, (2), 19-23.

Рагимов, Э. Р. (2005). КЛАССИФИКАЦИЯ УГРОЗ ПО СЕРВИСАМ БЕЗОПАСНОСТИ НА ОСНОВЕ СТАТИСТИЧЕСКИХ ДАННЫХ. Информационное противодействие угрозам терроризма, (5), 87-92.

Рагимов, Э. Р. (2011). Модель идентификации безотказной работы программных средств в корпоративных сетях. Телекоммуникации, (2), 2-5.

Алгулиев, Р. М., & Рагимов, Э. Р. (2005). Об одном методе оценки информационной безопасности корпоративных сетей в стадии их проектирования. Информационные технологии, (7), 35-39.

Rahimov, E., & Aghayev, T. (2026). Predictive Load Balancing in Distributed Systems: A Comparative Study of Round Robin, Weighted Round Robin, and a Machine Learning Approach. Engineering Proceedings, 122(1), 26.