ECB Economists Build Reddit Gauge Tied to Next-Day S&P 500 Returns

European Central Bank economists built an AI-based indicator from Reddit posts to track retail investor sentiment. They found changes in the measure were associated with next-day S&P 500 returns, especially when markets fell.

ECB economists Fabian Wagner and Julian Metzler described the Reddit Retail Investor Sentiment Indicator, or R-RISI, on Nov. 12. Their working paper, When the Crowd Speaks: AI-based retail investor sentiment indicator with Reddit data, was published Aug. 24. Its sample covers Reddit posts from 2015 through April 2026.

The indicator’s full corpus spans 14 finance, investing and crypto communities, including r/wallstreetbets, r/stocks and r/Bitcoin. The researchers use AI to classify posts by sentiment, topic and referenced asset. Reddit scores and comment counts affect each post’s weight, and daily readings are standardized against a rolling 365-day period.

“The R-RISI is timelier on short-term market dynamics and offers higher frequency information than survey-based indicators,” Wagner and Metzler wrote. Changes in the gauge were associated with next-day S&P 500 returns, with a stronger relationship during market declines. That association does not establish that sentiment causes or predicts a market move.

The indicator’s charts extend through Oct. 31, 2026, while the working paper’s sample ends in April. Those are different data windows.

The researchers also developed a Bitcoin-specific measure. It turned negative during the 2017-18 and 2022-23 crypto downturns, but diverged from Bitcoin prices more often and was more volatile than their AI-equity measure.

R-RISI tracks sentiment expressed in online posts, not users’ actual holdings or trades. Its readings are an index, not a percentage or probability, and the measure is not a return forecast. The researchers’ views do not necessarily represent the ECB or Eurosystem. The research’s AI labeling used the ECB’s large-language-model API, while its outputs and views are the authors’ own.