S&P 500 Plummets 3.5% After Fake News on Tariffs

On Monday morning, US equities experienced significant fluctuations, with the S&P 500 initially surging by as much as 8% before plummeting by 3.5% within seconds. This volatility was triggered by what the White House described as "fake news" regarding upcoming tariffs. The misinformation spread through popular social media accounts, claiming that the White House was considering a three-month pause on implementing tariffs. The White House swiftly refuted these claims, stating that the report was false.

The rumor originated from a comment made by White House National Economic Council Director Kevin Hassett during a Fox News interview. When asked if President Trump would consider a 90-day pause on tariffs, Hassett responded ambiguously, saying, "I think the president is going to do what the president is going to do." This statement fueled speculation and contributed to the market's erratic behavior.

In response to the ongoing trade tensions, President Trump threatened to impose a new 50% levy against China if the country did not back down from its retaliatory tariffs by Tuesday. Beijing had previously announced plans to impose a 34% tariff on US imports starting April 10. The White House had spent the weekend reassuring the public that tariffs would go into effect as scheduled on Wednesday. Commerce Secretary Howard Lutnick had stated that there would be no postponement of the policies, emphasizing that the higher levies would remain in place for an extended period.

Meanwhile, bitcoin prices remained relatively stable, hovering around $78,000 after falling below $80,000 on Sunday evening. Investors appeared to be trading cautiously, focusing on the potential impact of the tariff situation on the broader market rather than on cryptocurrency prices.

The market's reaction to the fake news highlights the sensitivity of investors to geopolitical risks and the potential for misinformation to cause significant market disruptions. The volatility in US equities underscores the need for clear and accurate communication from government officials to maintain market stability. As the trade tensions continue to unfold, investors will be closely monitoring developments and adjusting their strategies accordingly.