How long does it take for people to react to new stock market information?

Summary：Stock market reactions to new information occur within milliseconds. In a 2013 case, Chicago's market reacted faster than New York's, despite being farther from the news source, sparking an investigation. The lesson: by the time most hear or analyze market news, it's often too late to act.

Interestingly, how much time does it take for people in the stock market to receive new information, re-evaluate assets based on past experiences and market patterns, and then determine the new price of those assets? Do you think it takes a year, a month, a week, a day, an hour, a minute, or just a second?

Let me give you an example. On the afternoon of September 18, 2013, at 2 PM, the U.S. Federal Reserve was set to announce a major monetary policy that would undoubtedly have a significant impact on the market that day. It was pre-announced that the policy would be released precisely at 2 PM. As expected, the moment the news was released, the market reacted sharply.

However, there was something strange that day: the market in Chicago responded a few milliseconds faster than the market in New York.

Now, it’s important to note that the announcement was made from the Federal Reserve headquarters in Washington. The time it takes for the news to reach New York is about 2 milliseconds, while it takes 7 milliseconds to reach Chicago. So usually, after the Fed releases new information, the New York market reacts a few milliseconds ahead of Chicago. But on this occasion, Chicago responded faster than New York, which was highly unusual. This anomaly was serious enough that the Federal Reserve set up a special committee to investigate whether there had been a leak.

A few milliseconds—that's all it takes to process a piece of information, and being even slightly slower means you're already too late. So, if you think about it, by the time you've worked overtime, come home, taken a shower, reheated your dinner, and turned on the TV to hear stock analysts predict the market's future, it's already too late—the moment has passed.