A study by Warwick Business School indicates that the next financial crisis might be preceded by large numbers of people searching on Google for key political and business topics.
The authors of that study explain it this way: "Overall, we find that increases in searches for information about political issues and business tended to be followed by stock market falls. One possible explanation for our results is that increases in searches around these topics may constitute early signs of concern about the state of the economy--either of the investors themselves, or as society as a whole. Increased concern of investors about the state of the economy, or investors' perception of increased concern on a societywide basis, may lead to decreased confidence in the value of stocks, resulting in transactions at lower prices."
Well, yes, stock market movement has a lot to do with investors' moods--both founded and unfounded. Most would like to think that their approach is scientific and their mathematical formulas solid and sound, but sentiment affects the market arguably the most despite all these elaborate trappings and math-based crystal balls. The problem is that investor moods are contagious and tend to spread rapidly.
However, investors are not stupid. They know their kind is skittish and a stampede in one direction or another is always a possibility. Therefore many have worked various kinds of scary stuff into their formulas so that their predictions aren't unduly influenced by mob behavior. The authors of this study concede as much.
"However, our analyses provide evidence that the strength of this relationship has diminished in recent years, perhaps reflecting increasing incorporation of Internet data into automated trading strategies."
Quantifying the effects of online bullishness on international financial markets [ECB]
...In our work, we develop a simple, direct and unambiguous indicator of online investor sentiment, which is based on Twitter updates and Google search queries. We examine the predictive power of this new investor bullishness indicator for international stock markets. Our results indicate several striking regularities. First, changes in Twitter bullishness predict changes in Google bullishness, indicating that Twitter information precedes Google queries. Second, Twitter and Google bullishness are positively correlated to investor sentiment and lead established investor sentiment surveys. The former, in particular, is a more powerful predictor of changes in sentiment in the stock market than the latter. Third, we observe that high Twitter bullishness predicts increases in stock returns...