A new study shows that sentence structure, not sentiment, can predict price, volume, and regulatory risk.
What if the real market signal is not what companies say, but how they say it?
For years, analysts have studied financial reports, earnings calls, and CEO letters searching for emotional cues. They have tried to detect optimism, fear, or deception through sentiment analysis. Yet a new framework, the Syntactic Authority Index (SAI), measures something more fundamental: the structure of language. It does not analyze what leaders feel; it analyzes how their sentences encode authority.
The research demonstrates that specific grammatical constructions, such as deontic verbs (“must,” “shall”), nominalizations (“the implementation,” “the decision”), and strong passive forms (“is required,” “will be conducted”), consistently precede market movements. These forms express control rather than emotion, and the presence of control in language anticipates investor behavior.
The Discovery: When Form Predicts Function
The study examined 36,000 financial documents from U.S. and Latin American firms between 2010 and 2025. The results were clear:
- [ ] Abnormal returns appeared within three days of publication.
- [ ] Trading volume increased when syntactic authority intensified.
- [ ] Regulatory actions were more likely among firms with higher authority density.
When a firm wrote “we aim to reduce emissions”, the market reacted weakly. When it wrote “emissions shall be reduced under the new operational framework”, trading volume rose sharply. The syntax changed the perceived certainty of the statement, turning a hope into an order.
In several cases, regulatory filings with excessive use of passive or deontic forms predicted enforcement actions months before they became public. The pattern was consistent across sectors and languages.
Why Syntax Matters More Than Sentiment
Sentiment analysis captures emotion, while the Syntactic Authority Index captures structure. Investors appear to respond to the organization of control within a sentence, not to its tone. The same words, placed in a formal sequence, project authority and predictability.
A statement such as “steps will be taken to ensure compliance” offers no new data, yet markets often treat it as reassurance. Grammar becomes a proxy for confidence. Through syntax, companies communicate not their feelings but their command over uncertainty.
This insight builds on the theoretical notion of the regla compilada, described by Agustin V. Startari as a Type-0 production that binds form to decision. In practice, the rule functions as a linguistic mechanism of execution, turning structure into action.
From Language to Leverage: Real-World Implications
Investors can use syntactic metrics to detect hidden signals of control before price adjustments occur.
Regulators can track over-formalization in corporate disclosures, often a sign of internal stress or upcoming enforcement.
Corporate communicators can balance syntactic control and transparency, avoiding patterns that convey rigidity or defensiveness.
Central banks illustrate this principle every time they replace uncertainty with certainty. When a statement changes from “may act if conditions warrant” to “will act as needed”, volatility typically falls, even though no new information is provided. Syntax alone stabilizes expectations.
A New Frontier: Executable Power
The Syntactic Authority Index proves that linguistic form can operate as an informational signal. It bridges linguistics and finance by demonstrating that authority is not a human attribute but a structural effect of grammar. This finding supports the theory of executable power: the moment when linguistic form stops describing decisions and begins performing them.
If tone analysis tells us what leaders feel, syntactic analysis reveals what institutions intend to execute.
Citation Startari, A. V. (2025). Syntactic Authority Index and Market Signal. AI & Power Discourse Quarterly, Vol. 1. DOI: 10.5281/zenodo.15754714
Author Bio
Agustin V. Startari is a linguistic theorist and researcher in historical studies, author of Executable Power and The Grammar of Objectivity, and founder of AI & Power Discourse Quarterly (ISSN 3080-9789). ORCID: 0000-0002-5792-2016
Ethos
I do not use artificial intelligence to write what I don’t know. I use it to challenge what I do. I write to reclaim the voice in an age of automated neutrality.
Call to Action
Read the full paper on SSRN and companion archives:
- https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5634390
- https://zenodo.org/records/17406334
- https://figshare.com/articles/journal_contribution/Market_Signal_from_Syntactic_Authority_Syntactic_Authority_Index_and_Market_Signal/30406516?file=58913140
Learn how grammar itself may become the next predictive indicator in finance.
Author website: https://www.agustinvstartari.com
Real-World Examples for Diffusion
- Federal Reserve, 2020: When the statement “may act if necessary” became “will act as needed”, implied volatility declined sharply within a day.
- Tesla, 2020: The shift from “plan to expand production” to “production will expand under current strategy” coincided with a double-digit rally.
- BP, 2022: The appearance of “shall ensure compliance” preceded a positive shift in analyst outlook despite neutral earnings.
