1 week Ago
What does it take to move trillions in global markets? as last night it showed - all it needs is just one unverified headline ! This is the story of how sentiment whipped in minutes, based on pure speculation. Here's how it played out: Even as equity indices were starting to recover from lows - rumours broke that Trump may announce a 90-day tariff pause for all countries except for China. The headline was picked up and flashed across news networks — and Wall Street went vertical.
The S&P 500 had added over $3 trillion in market cap from its intraday low. The Dow surged 7%, S&P up 8.5%, and the Nasdaq rallied 10% — all in minutes.
But minutes later - came the first crack —reports said the white house was “unaware” of any such move. The White House officially denied the story to CNBC — calling it “fake news.” and almost immediately the market went south giving up all the gains it had accumulated a few minutes prior.
In all, trillions of dollars - by some estimates, a $6 trillion swing in less than 30 minutes — driven by headlines, hope, and herd behaviour! So what are the lessons for markets? Here in India as well! In a market this extreme, emotional and fragile: You can’t take headlines at face value - please investigate its sources first also it kind of helps to stay a bit Cynical until proven otherwise. Even if a short-term bounce cannot be ruled out and of course as it always is, short squeezes in bearish markets can be vicious! To wrap it up, I was wondering - markets did not give back all the gains it made not the back of that fake headline - why not? Well it could just be cleaner markets and people wanting to cut shorts after what has been one of the biggest 2 day falls in the 2 days prior! but I think market participants were also thinking - if a fake headline moved markets this much, imagine what a real one could do! Well that’s what the current scenario is — one of high anxiety, low trust, and a market that is moving faster than facts..
