buy the rumor, sell the fact

A phrase often quoted by stock or futures traders that explains price declines that occur after an anticipated positive event has happened. For example, stocks prices may rally ahead of the monthly unemployment report on the anticipation that employment will be weaker than expected. The weaker numbers are interpreted to mean that the Federal Reserve is likely to cut interest rates, which is a positive event for stocks because it lowers a company’s borrowing costs. However, when the actual unemployment numbers are released and match the lower expectations, stocks may trade lower.