Does Sport Move the Stock Market?

When a national team is knocked out of the World Cup, that country's stock market falls about half a percent below normal the next day. Not a rumour, not a market legend: a study of 39 countries published in the Journal of Finance, one of the most demanding journals in the field.

Nothing about those companies changed overnight. No factory closed, no contract was lost. The only thing that changed was the mood of the people buying and selling. That is what makes sport interesting to researchers, and it is the whole subject of this page.

Below: what the finding actually says, how big it really is, why betting markets turn out to behave like stock markets, and the personality trait that connects all of it. This page explains published research for learning. It is not financial advice, and section 03 explains in detail why the effect is not something you can trade.

In 2007, Alex Edmans, Diego Garcia and Oyvind Norli published Sports Sentiment and Stock Returns in the Journal of Finance. They matched international football results against stock market returns in 39 countries and found that after a World Cup elimination, the losing country's market underperforms by roughly 49 basis points, about half a percent, on the next trading day.

The detail that makes the study convincing is the one most summaries leave out: there is no equivalent bounce after a win. If sport simply added noise to prices you would expect symmetry. Instead the effect is one-sided, which is precisely what decades of psychology research predicts, because losses affect mood far more strongly than equivalent wins. A result that matched a known human asymmetry, rather than a tidy pattern in both directions, is much harder to dismiss as data mining.

The effect also scales with how much the country cares. It is larger in smaller markets and in football-obsessed nations, and the researchers found similar though weaker effects for cricket, rugby and basketball.

A textbook says a share is worth the future cash it will generate. A football result changes none of that cash. So when prices move anyway, something other than arithmetic is doing the moving.

This is why researchers reach for sport in the first place. Most market news is hopelessly tangled: an interest-rate decision changes both the mood of investors and the actual value of companies, so you can never separate the two. A World Cup elimination is different. It is large, sudden, emotionally powerful, effectively random, and completely irrelevant to corporate earnings. That combination is rare enough that economists call it a natural experiment, and it is the reason a football study ended up in a top finance journal.

The mechanism is unglamorous. Investors in a worse mood assess risk more harshly, hesitate to buy and are quicker to sell. Multiply small hesitations across a whole country for one morning and you get half a percent.

Half a percent sounds tradeable. It is not, and it is worth being precise about why, because this finding gets recycled constantly by people selling strategies.

The honest reading: this is strong evidence about how investors behave, and weak material for a strategy. Those are different things, and conflating them is how a good study becomes a bad trade.

The effect lands on national indices, which is exactly what the world heatmap shows. During a major tournament, the countries to watch are the ones whose teams played, on the session after the match rather than during it, because most eliminations happen when the home market is shut.

Timing is the part people get wrong. A late-evening European match finishes long after Frankfurt and London have closed, so the reaction arrives at the next open. If you want to know which markets are trading right now, the market clocks page answers it to the minute for twelve exchanges.

One caveat worth holding on to: a single match is a sample of one. The study measured an average across hundreds of games, and on any given day a dozen larger forces are pushing the same index around. Do not expect to see the pattern with your own eyes in one tournament. That is the difference between a statistical effect and a visible one.

The strangest result in this literature has nothing to do with mood. Tobias Moskowitz of Yale examined more than 100,000 sports betting contracts across 30 years and found that betting markets show the same momentum and value anomalies documented in stock markets.

Why that matters is subtle. For years, the standard defence of momentum and value in shares was that they are not mistakes at all but payment for bearing some hidden risk. A sports bet makes that argument hard to sustain: there are no cash flows, no discount rate, no economic risk premium, and the contract expires when the final whistle blows. If the same patterns appear in a market stripped of all those ingredients, the more natural explanation is that the patterns come from the people, not the assets.

For a trader, that is the genuinely useful takeaway on this page. The biases you bring to a screen are not caused by markets. You would bring them to anything with a price and an outcome.

If sport, betting and trading keep appearing together, one personality trait explains much of it: sensation seeking, the appetite for novel and intense experience.

The pattern across all five is the same. Sensation seeking gets people to the market and keeps them active, and on its own it damages returns. Paired with discipline it produces a durable trader; without discipline it produces a spectacular one, briefly.

That is a whole subject in itself, and it already has two pages here. If this section is the part you recognise, read Trading vs Gambling for what actually separates the two, or take the 90-second self-test.

Every page like this should be clear about its own limits, so here are the four claims that cannot be made from the evidence above.

No study surveys traders about sport. Nobody has asked whether traders follow football more than other people do. Every link on this page runs through market prices, betting behaviour or personality traits, never through fandom itself. It is a real gap in the literature, and any confident claim that traders are unusually sporty is invented.

Trading is not shown to cause problem gambling. The Calgary and Spanish studies establish overlap, not direction. People predisposed to both may simply do both.

The betting-volume result is one study, one state. The finding that betting handle rises when the S&P 500 falls comes from a single New York State analysis and has not been replicated. Interesting, unsettled.

None of this predicts tomorrow. These are averages over decades and dozens of countries. An average tells you about a population, never about the next case, and a market has many larger things on its mind than last night's result.

Does the World Cup affect the stock market?

Yes, measurably. Edmans, Garcia and Norli studied 39 countries for the Journal of Finance in 2007 and found the losing country's market returns about half a percent (49 basis points) below normal the day after an elimination. There is no matching gain after a win, which is what makes the result credible: losses move mood more than wins do.

How big is the sports effect on share prices?

About half a percent, for one day. Large enough to be statistically real across decades of matches, far too small to trade once spread, commission and slippage are paid. It is evidence about investor behaviour, not a signal.

Why would a football result change stock prices?

Because nothing about the economy changed, only the mood of the people trading it. Investors in a worse mood judge risk more harshly and hesitate to buy. Researchers use sport precisely because an elimination is a big, random shock to national mood with no effect on company earnings, which makes it a clean natural experiment that ordinary market news can never be.

Do sports betting markets behave like stock markets?

Yes, and it is the most surprising finding here. Moskowitz analysed over 100,000 betting contracts across 30 years and found the same momentum and value anomalies seen in shares. A sports bet has no cash flows or risk premium to argue about, so the shared pattern points to shared human biases rather than to hidden risk.

Are day traders more likely to gamble?

The research says yes. A Calgary study of 10,025 Canadians found its 467 day traders gambled significantly more than the 9,558 non-traders. A Spanish study found 24.9% of people combining trading with sports betting met problem-gambling criteria, against 0.5% of crypto-only traders. That shows overlap, not that trading causes the harm.

What is sensation seeking in traders?

The appetite for novel, intense experience, and it shows up repeatedly in traders. Grinblatt and Keloharju found Finnish investors with more speeding convictions trade more frequently, and a 2016 study found hedge fund managers who buy sports cars take more risk and prefer lottery-like stocks while delivering lower risk-adjusted returns. The trait that draws people to markets is not the one that makes them good at it.

Does sports betting volume rise when the stock market falls?

One study suggests so. Research published by NHSJS in 2024 found a statistically significant negative correlation between S&P 500 moves and sports betting handle in New York State: when the market fell, betting volume rose. It is a single state over a single period and has not been replicated, so treat it as a hypothesis worth watching rather than a settled fact.

Can I trade the World Cup effect?

No. It is half a percent for one day on a national index, usually in a market you do not trade, and it has been public since 2007. Costs consume most of it before you begin. This page explains research, it is not investment advice.

Which markets are most affected by sporting results?

Smaller national markets where the sport carries the most cultural weight, so football-driven countries rather than the United States. You can follow the national indices and country ETFs on the world heatmap, and check which exchanges are trading right now on the market clocks page.