The Long and Short-Term Effect of Social Media Manipulation on the NASDAQ Index

Year 2025, Volume: 12 Issue: 2, 363 - 385, 30.06.2025

Çağrı Ulu

https://doi.org/10.30798/makuiibf.1378862

Abstract

Social media's power to manipulate the financial markets has sparked significant debates, particularly regarding its impact on stock exchanges and cryptocurrency markets. This study investigates the influence of social media manipulation, specifically through Twitter, on the NASDAQ Composite index during its decline from December 1, 2021, to January 31, 2022. Utilizing daily data, the research emphasizes the direction of the relationship between Twitter sentiment and the NASDAQ index. Sentiment analysis, conducted using TextBlob, determines the positivity or negativity of the language used in tweets related to NASDAQ. The study tests the hypothesis of a long- and short-term relationship between the sentiment scores and the index. Time series analysis required ensuring stationarity, which was verified using modern and traditional unit root tests. Subsequently, an ARDL model was employed to examine these relationships. The findings reveal that social media manipulation via Twitter does not impact NASDAQ Composite prices in either the long or short term. Instead, price variations in the NASDAQ Composite index are significantly influenced by the sentiment expressed on Twitter.

Keywords

Twitter , Sentiment Analysis , ARDL Bound Test , NASDAQ

Ethical Statement

Ethics Committee approval was not required for this study. The author declares that the study was conducted in accordance with research and publication ethics. The author confirms that no part of the study was generated, either wholly or in part, using Artificial Intelligence (AI) tools. The author declares that there are no financial conflicts of interest involving any institution, organization, or individual associated with this article. The author affirms that the entire research process was performed by the sole declared author of the study.

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