A false post on social media sent US markets into a frenzy yesterday, with trillions of dollars in value added to companies’ shares in minutes, only to be erased when the truth emerged. Investment strategists are calling it one of the most unforgettable days of trading in decades.
The markets had opened lower, with traders still grappling with the uncertainty surrounding President Donald Trump’s tariffs. However, within the first hour, the Dow Jones and Nasdaq began rallying, briefly entering positive territory. In a mere 10-minute window from 10:05 to 10:15 AM New York time, shares on US markets surged by almost 10%, only to reverse just as quickly.
The dramatic shift was triggered by a rumor circulating among traders that the Trump administration was considering a 90-day pause on its planned tariffs. This news seemed to be a welcome sign for investors, but it turned out to be entirely false.
Dan Moroney, an investment strategist at RBC Brewin Dolphin, expressed disbelief at the event, stating, “In over 20 years working in markets, I can’t really recall anything quite like it.”
The source of the rumor was an anonymous post on X (formerly Twitter) from the account of Walter Bloomberg, who has more than 800,000 followers. The account frequently shares headlines from financial news outlets like Bloomberg and Reuters. At 10:13 AM, the account posted that US National Economic Council Director Kevin Hassett had said President Trump was considering a 90-day pause on tariffs.
The post quickly spread among investors, and traders on the New York Stock Exchange responded enthusiastically. One CNN reporter on the floor at the time noted hearing cheers among traders as stocks surged. CNBC followed suit, reporting the rumor at 10:15 AM, and soon after, Reuters also picked it up.
However, just an hour later, White House sources denied any knowledge of such a plan, labeling the story as “fake news.” The rumor appeared to be based on a misinterpretation of comments made by Kevin Hassett during a Fox News interview earlier that morning. When asked if Trump would consider a 90-day tariff pause, Hassett had simply said, “The president’s going to decide what the president’s going to decide,” which was later misinterpreted as a sign that a tariff pause was in the works.
The post from Walter Bloomberg was later deleted, but the damage had already been done. The incident underscores how easily markets can be swayed during times of uncertainty and heightened anxiety.
Moroney reflected on the volatility, saying, “That’s the kind of skittish market that we’re operating in. They were crying out for some relief and some good news.”
The episode serves as a stark reminder of the power of social media in the financial world and the fragility of market confidence. Despite the rumour’s quick demise, it highlighted the risks of misinformation and the vulnerability of traders to even the slightest hint of positive news in an otherwise tumultuous economic climate.
