How actual 'fake news' sent Wall Street on a $2.4 trillion rollercoaster in just 15 minutes
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Wall Street went on a $2.4 trillion joyride Monday— all because of a rogue tweet claiming that President Donald Trump might pause his punishing new tariffs for 90 days.
The massive swing played out in just 30 chaotic minutes before markets snapped back to reality.
The dizzying market U-turn exposed just how jittery Wall Street has become — where even a hint of hope sends stocks soaring, only for rumors to trigger a crash minutes later.
At the close, the Dow Jones was down 1 percent, the S&P 500 had slipped 0.2 percent and the Nasdaq was just green.
It wasn't a great day on Wall Street — but at one point it there were fears of a repeat of 1987's Black Monday.
In the morning, all three major U.S. indexes touched their lowest levels in more than a year, while the VIX — Wall Street's fear gauge — hit its highest level since August 2024.
It was fuelled by Trump doubling-down on his sweeping new tariffs. Mid morning, the President threatened to hike tariffs on China by an additional 50 percent.
Then came the twist. Stocks abruptly reversed course after White House economic adviser Kevin Hassett was reported as saying in an interview that Trump was considering a tariff pause on all countries except China.
He hadn't. The false posts appear to have stemmed from a real Fox News interview with Hassett around 8.30am ET. When asked if Trump might consider a 90-day pause in tariffs, Hassett vaguely replied, 'The president is going to decide what the president is going to decide.'
It spread quickly on X. Not long after, the White House shot it down, calling the delay 'fake news.'
Stocks slumped again on the administration's clarification and then whipsawed all day.
Wall Street saw wild trading with the Dow Jones swinging 2,500 points between its highs and lows.
Initially, it looked like US stocks would be slammed for a third trading day in a row as Trump said he wouldn't back down on his sweeping new tariffs. In fact, just after 11am the President threatened to hike tariffs on China by an additional 50 percent.
The wild moves meant trillions is being wiped off then added to the value of US stocks, which are a key component of Americans' 401(K)s and other savings accounts.
Trading floors across Asia and Europe were all down. Hong Kong led the collapse, crashing 13.2 percent — its worst drop in nearly 30 years. Tokyo was down 8 percent.
There were fears of a repeat of 1987's Black Monday. 'Black Monday' started trending on X - a reference to the global and severe stock market crash of 1987, as uncertainty grows before the US markets open at 9.30am EST Monday.
'The underlying problem of the market is that the administration's approach to trade imbalances is to try a cure that's worse than the disease,' said Rick Meckler, partner, Cherry Lane Investments, a family investment office in New Vernon, New Jersey.
'It's clear that investors favor either a pause or a different look at how to do this. It's very telling that of the many Trump supporters in the investment and business community, it doesn't look like there's anybody stepping up and endorsing the administration's approach to tariffs.'
In the two days following Trump's tariff announcements last week, stocks cratered.
It was the worst two-day wipeout in US stock market history — with $6.6 trillion wiped off the value companies.
Trump's 10 percent 'baseline' tariff began Saturday, hitting all US imports except goods from Mexico and Canada. Come April 9, higher levies on goods from 57 larger trading partners — including the European Union — begin.
Bill Dudley, a former president of the Federal Reserve Bank of New York, said Monday that stagflation is now the 'best case scenario' for the US economy.
Stagflation is the combination of economic stag-nation and in-flation. Prices continue to soar at the same time as economic growth slows and unemployment rises.
Many economists consider stagflation, which was last seen in the US in the 1970s, to be worse than a recession.
Dudley, who served as the president of the New York Fed from 2009 to 2018, made the comments in a column for Bloomberg.
'Don't expect the Federal Reserve to rescue the US economy from the epic tariffs the Trump administration has imposed on imports from most of the world. The only question now is how bad the damage will be,' he wrote.
'All told, stagflation is the optimistic scenario. More likely, the US will end up in a full-blown recession accompanied by higher inflation.'
Meanwhile, one of Fox News' most respected business experts has admitted Donald Trump's tariffs may well cause a recession, hours after providing a cheerier outlook before Monday's opening bell.
Maria Bartiromo acknowledged the potential economic nightmare live on-air Monday morning, as a ticker next to her face showed the Dow Jones stock index plunging in real-time.
Earlier in the day, Jamie Dimon, 69, the CEO of JPMorgan, has sounded the alarm on tariffs.
The banker wrote to his shareholders saying that President Trump's import taxes would 'slow down growth.'
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