Rubbish Talk app Cut the spin.
Read the facts. Suspicious of a headline?
Check it.
Rubbish Check
CBS MoneyWatch · August 18, 2026 source

“DEI policies brought no financial penalty to firms, study finds”

R2/ 10
Lightly altered
Rubbish Rating — 1 = base fact, 10 = pure rubbish
12345678910
In short
Rubbish Talk rates CBS MoneyWatch's headline that DEI policies "brought no financial penalty to firms" a 2/10 because it accurately reflects the core finding of a new Folsz/Grumbach working paper on S&P 500 abnormal returns, though it drops the comparative framing ("companies that kept them") used in CBS's own page title and skips past legal-retaliation risk noted lower in the piece.
The Verdict
Lightly altered. The headline is a faithful, if compressed, summary of a real academic finding, the study genuinely found no difference in abnormal stock returns or revenue between firms that kept versus dropped DEI, but the feed version strips out the "compared to firms that dropped it" framing present in CBS's own page title, and buries the caveat that political/regulatory retaliation risk is a separate, real concern the study didn't measure.

What actually happened

Economists Hanna Folsz (Stanford) and Jacob Grumbach (UC Berkeley) released a paper, "Markets Do Not Punish Firms for Maintaining DEI," after Executive Order 14173 directed federal agencies to investigate and eliminate corporate DEI programs, leading S&P 500 firms to split between keeping and rolling back their diversity programs. The researchers compared stock and revenue performance of firms that stuck with DEI against those that scaled it back following Trump's January 2025 executive order.

Key facts

  • The study focused on the companies' financial performance before and after President Trump signed Executive Order 14173, "Ending Illegal Discrimination and Restoring Merit-Based Opportunity," in January 2025.
  • Corporations in the S&P 500 that maintained their DEI programs performed just as well in terms of stock market returns and revenue as firms that wound down their diversity efforts.
  • Comparison group: Apple, Costco, Delta Air Lines and Dollar Tree made no changes to their DEI programs, while Target and Walmart rolled theirs back.
  • Methodology: researchers measured "abnormal performance," the gap between expected and actual share returns; no difference in abnormal returns and no detectable revenue difference emerged between the two groups.
  • Caveat from co-author Grumbach: firms out of step with the executive order still face risk of "less favorable treatment from the executive branch," blocked mergers, or "hostile tax auditing," a risk the stock-return data doesn't capture.
  • Exceptions exist: Bud Light's parent AB InBev saw shares plunge after backlash in 2023, and Target faced a 2025 boycott push after ending DEI initiatives.
  • A 2025 Gallup/Bentley University poll found roughly six in ten Americans believe diverse workforces make businesses more profitable and innovative.

What to watch for

Watch whether the paper clears peer review, this is new research (dated August 14, 2026) covering roughly 19 months of data, a short window for a stock-market natural experiment. Also watch for DOJ or FTC enforcement actions against DEI-maintaining firms, since Grumbach's own caveat about regulatory retaliation is the risk this study's returns-based methodology cannot price in.

About this scoreThe R-Score is Rubbish Talk's editorial opinion on how far a headline's framing sits from what the underlying facts support. It is a judgement about presentation and emphasis, not an allegation that any outlet has acted dishonestly. Every figure we rely on is linked under Receipts so you can check it yourself.
Share this CheckXFacebookLinkedInEmail