ChatGPT and Deepseek: Can They Predict the Stock Market and Macroeconomy?
Jian Chen (Xiamen University), et al.
February 2025
We study whether ChatGPT and DeepSeek can extract information from the Wall Street Journal to predict the stock market and the macroeconomy. We find that ChatGPT has predictive power. DeepSeek underperforms ChatGPT, which is trained more extensively in English. Other large language models also underperform. Consistent with financial theories, the predictability is driven by investors’ underreaction to positive news, especially during periods of economic downturn and high information uncertainty. Negative news correlates with returns but lacks predictive value. At present, ChatGPT appears to be the only model capable of capturing economic news that links to the market risk premium.
Daily Archives: March 21, 2025
Macro Briefing: 21 March 2025
US jobless claims rose modestly last week, but remain low, suggesting the near-term outlook for the labor market remains positive. Claims rose 2,000 to a seasonally adjusted level of 223,000, a middling level relative to recent history.
