The Hidden Toll of Social Media News: Causal Effects on Psychosocial Wellbeing

News consumption on social media has become ubiquitous, yet how different forms of engagement shape psychosocial outcomes remains unclear. To address this gap, we leveraged a large-scale dataset of ~26M posts and ~45M comments on the BlueSky platform, and conducted a quasi-experimental study, matching 81,345 Treated users exposed to News feeds with 83,711 Control users using stratified propensity score analysis. We examined psychosocial wellbeing, in terms of affective, behavioral, and cognitive outcomes. Our findings reveal that news engagement produces systematic trade-offs: increased depression, stress, and anxiety, yet decreased loneliness and increased social interaction on the platform. Regression models reveal that News feed bookmarking is associated with greater psychosocial deterioration compared to commenting or quoting, with magnitude differences exceeding tenfold. These per-engagement effects accumulate with repeated exposure, showing significant psychosocial impacts. Our work extends theories of news effects beyond crisis-centric frameworks by demonstrating that routine consumption creates distinct psychological dynamics depending on engagement type, and bears implications for tools and interventions for mitigating the psychosocial costs of news consumption on social media.