Geopolitical shocks and global stock markets: panel evidence and neural network insights (2016–November 2025)

PurposeThis study aims to analyze how geopolitical, climate and monetary news affects stock market returns and volatility.Design/methodology/approachFirst, this study developed eight news indices covering geopolitical, economic and environmental topics, and measured their impact on the returns and volatility of 26 global stock markets (15 emerging and 11 developed) from January 2016 through November 2025. The proposed models include panel econometric methods (OLS, DOLS and FMOLS) and a multilayer perceptron artificial neural network.FindingsIt is suggested that the response of developed markets is limited compared to that of developing markets. For developed countries, Russia–Ukraine conflict, Trump announcements, the supply chain pressures and the conflict between China and the US are statistically significant news indices. These results could be explained by the fact that several of the developed markets studied are in Europe and are directly affected by the conflict. On the other hand, Trump’s announcements also affect his main trading partners (the Netherlands, Germany, among others). The response of developing markets is oriented toward COVID-19, changes in Federal Reserve interest rates, global warming, the supply chain and news about the war. This response is related to the fragility of these markets and their dependence on foreign investment flows from developed markets.Originality/valueThis research stands out and contributes in several ways: i) the sample size, which includes both developed and developing countries, allowing for a comparison of the response of each type of economy; ii) the creation and proposal of new indices with three impact windows and iii) the comparison of different types of econometric and artificial intelligence-based models. The results are crucial for economic policy communication, portfolio investment and its coverage, as well as market sentiment reactions to new information related to critical issues.