The Influence of Social Media Sentiment on Stock Market Behavior

Author(s)	Tejasvin Sharma
Country	India
Abstract	The rapid growth of social media has fundamentally changed how financial information spreads and how investors make decisions. This paper examines the influence of online sentiment on stock market behavior by analyzing how digital platforms affect investor psychology, market volatility, and price movements. Through an extensive review of existing literature and comparative case studies of the 2021 GameStop short squeeze and the 2023 Adani Group controversy, the paper explores the role of fear of missing out (FOMO), herding behavior, and information diffusion in shaping investment decisions. A key contribution of this study is highlighting an overlooked research gap: the impact of the "silent majority" of social media users, or lurkers, who consume financial information without actively posting but may still significantly influence market activity through their investment decisions. The findings suggest that while visible online discussions contribute to market sentiment, passive consumers of digital information may represent an equally important yet underexplored force in financial markets. The study concludes that understanding both active and passive social media participants is essential for improving market prediction models, behavioral finance research, and regulatory responses to information-driven market volatility.
Field	Business Administration
Published In	Volume 8, Issue 5, September-October 2026
Published On	2026-10-11

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