Fake News Roils the Markets

On April 7, 2025, U.S. stock markets experienced unprecedented volatility, with the S&P 500 surging approximately 8% before swiftly retreating by 3.5% within minutes. This dramatic fluctuation was triggered by the dissemination of false information regarding U.S. trade policy.

The day began with markets in decline, as the S&P 500 dropped by as much as 4.7%, entering bear market territory. The downturn was attributed to escalating trade tensions following President Donald Trump's announcement of sweeping new tariffs on foreign imports, some as high as 50%. This move prompted panic selling, wiping nearly $9.5 trillion off global equity markets over three days.

Mid-morning, a fraudulent and now-deleted post from @DeItaone (Walter Bloomberg) account on X cited National Economic Council Director Kevin Hassett, suggesting a potential 90-day pause on tariffs for all countries except China. The news quickly spread to CNBC, which stupidly posted the report before verifying its authenticity.  Meanwhile, investors, interpreting this fake news as a de-escalation of trade tensions, initiated a rapid buying spree, propelling the S&P 500 up by 8.5% within 34 minutes and temporarily adding $3.6 trillion in market value.  

However, the White House promptly refuted these claims, confirming that no tariff pause was planned and labeling the report as "fake news." As the misinformation was corrected, the market relinquished its gains, with the S&P 500 declining by 3.5% shortly thereafter. Further exacerbating market instability were reports that President Trump was contemplating additional 50% tariffs on Chinese goods in retaliation for China's countermeasures.  

Attorney General, Pam Bondi has been asked to investigate the circumstances surrounding the fraudulent post from @DeItaone (Walter Bloomberg).  This form of market manipulation is unconscionable given the severity of market moves over the past several weeks.

This episode underscores the heightened sensitivity of financial markets to trade policy developments and the profound impact that misinformation can have on investor behavior. It also highlights the necessity for investors to exercise caution and verify information before reacting to market-moving news.