 U.S. Presidential news coverage: Risk, uncertainty and stocksKam Fong Chan and Lee Smales International Review of Economics & Finance, 2025, vol. 98, issue C Abstract: By measuring the frequency of risk and uncertainty synonyms adjacent to mentions of sitting U.S. Presidents in news articles, this study introduces the Presidential Uncertainty and Risk (PUR) index. The index displays distinctive spikes during pivotal events such as presidential elections, presidential debates, and military conflicts, thus capturing signals relevant to investors gauging political risk and uncertainty. This robust pattern is consistent across different Presidential administrations, irrespective of the incumbent President's political party. Firms featured in PUR-news articles attract the attention of both retail and institutional investors. Moreover, a unit increase in the standard deviation of the frequency of words connotating risk and uncertainty is associated with an economically significant 21.3 basis points decrease in abnormal stock returns over the month following the news. These findings suggest that heightened political risk and uncertainty affect both investor attention and stock performance. Keywords: Presidential election; Political uncertainty; News sentiment; Cross-section of stock returns; Textual analysis (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:98:y:2025:i:c:s1059056025000905 DOI: 10.1016/j.iref.2025.103927 Access Statistics for this article International Review of Economics & Finance is currently edited by H. Beladi and C. Chen More articles in International Review of Economics & Finance from Elsevier |
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