Unraveling the Impact: How a Fake X Post on Tariff Pauses Triggered Trillion-Dollar Market Volatility

On a chaotic Monday, the stock market experienced dramatic swings, triggered by false reports circulating on Elon Musk’s X. This event highlighted just how impactful social media can be, even as it spreads misleading information.

Here’s what went down: During a live interview on Fox News, Kevin Hassett from the National Economic Council discussed whether President Trump would consider pausing tariffs imposed on various countries. Hassett’s response was vague, leading to speculation.

Shortly afterward, a misleading headline surfaced, claiming Trump was considering a 90-day tariff pause for all countries except China. This false report first appeared just before 10:11 a.m. ET on the account “Hammer Capital,” which has around 1,100 followers. Although relatively obscure, this account has a blue verification badge, a feature that gives posts wider visibility.

As the false claim spread, dozens of accounts with verification badges shared it. Major news organizations like Reuters and CNBC picked up the story, perpetuating the misinformation. Just minutes later, the atmosphere on the New York Stock Exchange shifted dramatically, as investors cheered the perceived tariff pause.

A crucial moment occurred around 10:12 a.m. ET when the account “Walter Bloomberg,” boasting over 850,000 followers, tweeted the false headline. Although not officially linked to Bloomberg News, its posts often mimic established news sources. This spurred discussions among analysts on CNBC about the supposed 90-day reprieve from tariffs.

However, the White House quickly denied the rumors. Both Reuters and CNBC had to retract their stories as stock prices began to fluctuate wildly. Between 10:08 and 10:18 a.m., an astonishing $2.4 trillion in market value changed hands, highlighting how powerful social media can be in driving economic sentiment.

Statistics show that misinformation spreads six times faster than the truth on social media platforms. This incident exemplifies how quickly unverified information can influence industries and economies. Scholars like Kate Starbird from the University of Washington point out the need for better verification processes online. She noted, “Our social media systems — and X in particular — are designed in such a way that rumors spread extremely quickly, while corrections lag far behind.” This is compounded by recent changes in account verification on X, making it even harder for users to assess trustworthy information.

In response to inquiries, both Reuters and CNBC acknowledged their mistakes and attributed the error to the initial false report. Conversations online highlighted mixed feelings among users, with many expressing frustration over how easily misinformation can affect markets and daily lives. The need for vigilance and a better understanding of where information comes from has never been greater.

This incident serves as a powerful reminder of the influence of social media on not just conversations, but also on major economic indicators. As we navigate these waters, the importance of critical thinking and scrutiny of sources is paramount.

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