How a false X post triggered a brief trillion dollar rally on Wall Street
A false X post about a Trump tariff pause sparked a brief 10% swing in the Nasdaq. Here's what you need to know
Source: iStock
KEY POINTS
- A false X post about a Trump tariff pause sparked a 10% Nasdaq swing, adding ~US$2.2 trillion in market cap in early trade
- The White House quickly debunked the claim, driving major US benchmarks closer to breakeven by market close
- Funds and institutional players likely drove the rally amid thin market liquidity
The Nasdaq experienced a 10% swing in a brief 45-minute window on Monday night after a false report on X said that Trump is considering a 90-day pause on all tariffs except China.
That equates to a little over US$2.2 trillion in gains for the tech-heavy index, showing just how desperate the market is for a relief rally. Even if it's based on fake news.
Nasdaq Composite intraday chart | Source: TradingView)
Sequence of Events
The sequence of events began with an interview on Fox News featuring Kevin Hassett, the director of the National Economic Council. When asked about the possibility of a pause on the 'Liberation Day' tariffs, Hassett offered a vague response: "I think the president is going to decide what the president is going to decide."
This ambiguous statement left room for speculation, which was quickly filled by several influential X accounts, including one run by an anonymous user named Walter Bloomberg (not affiliated with Bloomberg), with around 850,000 followers. Walter is generally a credible source for market-related news, quoting mainstream sources like Bloomberg, CNBC and Reuters.
The account posted that "Trump is considering a 90-day pause in tariffs for all countries, except China."
The headline gained traction when CNBC mentioned it around 10:14 a.m. ET, attempting to explain the market's movements. An anchor noted the claim's unclear origin, but the network still displayed the headline in an on-air graphic.
Reuters, citing CNBC, published a headline stating that White House economic adviser Kevin Hassett had confirmed President Trump's consideration of a 90-day tariff pause on all countries except China.
White House Clarity
The White House quickly moved to clarify the situation, posting on X that the claim was false and reposting Hassett's Fox News appearance to emphasise that no such pause had been proposed.
In the aftermath, the Nasdaq finished the session around breakeven, which is still well above the brief 5% drop it experienced in early trade.
What Drove the Surge?
The fake news circulated quickly and drove billions of dollars into the market. Funds and institutional investors, keen to buy the dip and capitalise on the oversold bounce, likely fueled the rally. These players often rely on algorithms that scan headlines, social media, and market data in real time, triggering automatic stock purchases on signals like a tariff pause.
The bounce was magnified by thin market liquidity. During periods of uncertainty, trading volume dries up as participants hesitate — either awaiting clarity or avoiding volatile missteps.
With fewer shares available, big algo-driven buy orders from funds seeking millions in exposure forced prices up sharply, amplifying the short-lived rally.
