Multi-trillion-dollar stock market swings on Monday appear to have been set off by false reports on Elon Musk's X. Experts say the episode highlights the social media site's enduring influence, even as it helps amplify falsehoods.
How did it happen?
Around 8:30 a.m. ET, the National Economic Council's Kevin Hassett was asked during a live Fox News interview whether President Trump would consider a 90-day pause to the sweeping tariffs he imposed on many countries last week. Hassett responded: "I think the president is going to decide what the president is going to decide."
On X, that morphed into a bogus headline that Trump was considering a 90-day pause on tariffs for all countries except China.
It appears the X account "Hammer Capital" was the first to share this false report, around 10:11 a.m. ET on Monday. The account has just over 1,100 followers, and it has a blue verification badge, a paid feature that helps enhance the reach of user's posts.
From there, the erroneous headline took on a life of its own.
Dozens of other accounts with blue verification badges reshared it. Not long after, news organizations including Reuters and CNBC reported the unsubstantiated claim.
Around 10:12 a.m. ET, cheers broke out across the New York Stock Exchange trading floor, according to CNN, as the market rallied on the false premise that the White House was weighing a tariffs pause.
About a minute later, it was posted by the X account "Walter Bloomberg," which has more than 850,000 followers. Although the account is not affiliated with Bloomberg News, it often shares the news organization's headlines. The account's boosting of the false headline prompted chatter among CNBC analysts on live television about a possible 90-day reprieve from Trump's tariffs.
Reuters, citing CNBC, then published a headline carrying the inaccurate tariff pause report.
The White House denied the report. The Walter Bloomberg account deleted the post on X. Reuters and CNBC soon backtracked, but not before stock markets gyrated to the tune of $2.4 trillion between the time of 10:08 a.m. and 10:18 a.m., according to Dow Jones Market Data.
In statements to NPR, Reuters said it has withdrawn the incorrect report, blaming a headline published on CNBC. When asked for comment, CNBC said it "aired unconfirmed information in a banner," which it "quickly" corrected. The network would not comment on the source of its information.
The wild market swing reflected how Wall Street investors are increasingly gripped with fear that Trump's tariffs could lead to global economic instability.
Neither X nor Musk responded to NPR's requests for comment.
Reporters went back-and-forth with the relatively obscure finance-focused X account "Hammer Capital" that appears to have started the rumor. Whoever is behind the account claimed to be merely sharing information from "trading desks," but would not elaborate.
Attempts to reach the person behind the Hammer Capital account were unsuccessful.
To scholars of disinformation like Kate Starbird at the University of Washington, the market mayhem spurred by posts on X underscores the dangers of social media with both few guardrails and policies in place that incentivize virality over truthfulness.
"Our social media systems — and X in particular — are designed in such a way that rumors spread extremely quickly, while corrections lag far behind. Verification is challenging (and slow), in part because it's often hard to determine the original source of a particular claim," Starbird told NPR.
"Changes to account verification on X, which were put into place after Musk purchased Twitter, make it even more difficult now for social media users and other information consumers to figure out which accounts and what information we should trust."
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