From under- +‎ react.

• (General American) IPA^(key): /ˌʌnd.əɹ.ɹiˈækt/
• (Received Pronunciation) IPA^(key): /ˌʌndəɹiˈækt/

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underreact (third-person singular simple present underreacts, present participle underreacting, simple past and past participle underreacted)

1. (intransitive) To react inadequately.
   • 2009 October 11, Conrad De Aenlle, “When Emotions Move the Markets”, in New York Times‎^[1]:

     “Investors tend to underreact to positive fundamental change,” said Horacio Valeiras, chief investment officer of Nicholas-Applegate Capital Management.

• underreaction

• unterraced