Many of us check the weather forecast to plan our day – to decide whether to carry an umbrella, postpone a trip or work from home when snow is on the horizon. But weather alerts can influence more than just our personal routines. They can also move financial markets.

We have explored this phenomenon in our new research and our findings were both surprising and increasingly relevant in a world of climate change. It seems severe weather alerts can indeed move stock prices. This was unexpected, as alerts are simply warnings, not actual disasters. Yet they are enough to shift market values.

Using detailed UK data on weather alerts from 2015 to 2023 alongside the stock prices of firms with headquarters in affected areas, we showed that investors react negatively to severe weather warnings. On average, firms with headquarters in regions covered by severe weather alerts see their share prices drop by about 1%. It’s a seemingly small drop but it can actually wipe out millions in value for large companies.

This suggests that weather alerts, once considered mainly........

© The Conversation