How Actual ‘Fake News’ Caused Unprecedented Market Whiplash
In today’s fast-paced digital landscape, misinformation can travel faster than the speed of light. A recent event on the social media platform X (formerly known as Twitter) has dramatically underscored this reality, sending shockwaves through the stock market and illustrating the profound influence—and peril—of unverified information.
The Catalyst: A Misinformed Post
On a seemingly ordinary Monday morning, an errant post ignited a frenzy among investors. The warning signal? Unsourced headlines suggesting a possible “90-day pause in tariffs” under the Trump administration stirred immediate excitement among market watchers. However, this buzz was swiftly quashed as the White House denied the rumor, revealing the treacherous undercurrent of misinformation that can swing markets into chaos.
The Origin of the Turmoil
The misleading posts seemed to originate from an interview with Kevin Hassett, Director of the National Economic Council, around 8:30 a.m. ET on Fox News. When asked whether President Trump was considering pausing tariffs, Hassett responded vaguely, saying, “The president is (going to) decide what the president is (going to) decide.” Little did he know that this ambiguity would feed the flames of speculation.
At 10:11 a.m. ET, an account called “Hammer Capital”—with a modest following of fewer than 1,000 users—was the first to misquote Hassett. As the smoke cleared, it became clear that sources had misinterpreted his words, igniting frenetic trading activity.
The Ripple Effect: Market Reactions
By 10:12 a.m., the buzz was palpable. CNN’s Vanessa Yurkevich reported cheers erupting from the trading floor. As the stock indices soared, excitement transformed into astonishment as CNBC’s anchors grappled with the, at the moment, unexplained market rally.
“So what just sent the markets soaring?” CNBC anchor David Faber and his colleagues pondered aloud, frantically scouring their screens for any evidence of a credible alert. Shortly thereafter, the speculative headline was on air as Carl Quintanilla proclaimed, “We’re trying to source that exactly in terms of where that’s coming from,” lending a sense of misplaced authority to the rumors.
With twinges of enthusiasm, CNBC displayed the banner reading: “HASSETT: TRUMP IS CONSIDERING A 90-DAY PAUSE IN TARIFFS FOR ALL COUNTRIES EXCEPT CHINA.” This further propelled the narrative, showcasing how misinformation offered a misleading sense of security.
Unraveling the Fabric of Trust
By 10:19 a.m., Reuters picked up the supposed comment, citing CNBC, which added to the confusion. As the day progressed, stocks began to plummet as reality set in and the White House firmly denied the claim. CNN and CNBC reporters scrambled to retract the information, with Reuters issuing an advisory by noon regretting its previous alert.
Unfortunately, this event wasn’t just a simple blunder. The “Walter Bloomberg” account, which boasted over 800,000 followers, had taken to social media borrowing its name from the reputable Bloomberg financial service to lend an air of authenticity to its posts. Meanwhile, Hammer Capital frequently shared headlines and stock market memes, blurring the lines of credibility in the process.
Unlike traditional verification processes, social media platforms have altered the landscape significantly. Since Elon Musk’s takeover of X, the blue checkmark—once a symbol of verification—has been repurposed as a paid feature, allowing anyone to appear credible.
Lessons Learned: The Need for Integrity in Reporting
Once the damage was done, Walter Bloomberg deleted the post, claiming they first spotted it on Reuters. The fallout left market participants in confusion, pondering how such unreliable information could precipitate significant financial consequences. Hammer Capital attempted to clarify, stating, “To be as abundantly clear as possible, trading desks started sending out this headline at 10:09. I was regurgitating what the market was reacting to, to my 600 followers. It was an incorrect interpretation of a Fox News interview.”
Regardless of the original source of the fake news, its amplification by self-styled credible sources serves as a cautionary tale: the market is only as reliable as the information it consumes. This incident has exposed a vulnerable Achilles’ heel in the financial reporting ecosystem—a powerful reminder of the importance of verifiable sources and the potential volatility unleashed by unchecked misinformation.
In a time when the stakes have never been higher, it’s imperative for both traders and news organizations alike to prioritize accuracy over speed. Let this experience serve as a reminder that in the world of finance and information, the price of a headline can be far greater than anticipated.
