Everyone was alarmed by the sudden power outage, but she was underreacting by calmly reading her book.

underreacting 是由前缀 under-（表示"不足"）和动词 react（反应）加上后缀 -ing 构成的现在分词形式。underreact 指"反应不足、反应不够强烈"，与 overreact（反应过度）相对。underreacting 在这里表示"在应该强烈反应的场合表现得过于平静"。