1 week Ago
Traders work on the floor of the New York Stock Exchange during morning trading on April 08, 2025 in ...
More New York City. (Photo by Michael M. Santiago/Getty Images) Misinformation is increasingly common on social media, and users are quick to help it spread.
Such was the case on Monday, when a single post on X, the social media platform formerly known as Twitter, caused major moves on the stock market . It came after a bogus headline was shared that President Donald Trump was considering a 90-day pause on the sweeping tariffs that were imposed last week. According to the post, the tariffs would be lifted, albeit temporarily, on all countries but China.
That sent stocks surging, yet that was only temporary. After the White House called the reports "fake news," the surge turned to a purge, and the market closed down on Monday afternoon. Part of the problem is that supposedly trusted accounts shared the rumors, while other "verified" accounts picked up on the news.
As NPR explained , "Not long after, news organizations including Reuters and CNBC reported the unsubstantiated claim." This isn’t an isolated case, and experts have warned that investors should not put faith in a single post made on social media as being a sound stock market tip. In November 2015, the U.
S. Securities and Exchange Commission's Office of Investor Education and Advocacy issued an "Investor Alert" to warn investors about fraudsters who may attempt to manipulate share prices by using social media to spread false or misleading information about stocks. This latest wild ride on the markets also highlights the fact that there is too much trust in posts on social media, even when it really shouldn't be that hard to confirm.
This may have also been coupled with wishful thinking among those who may have seen their portfolios take a major hit. "In this atmosphere, it's easy for the forces of hope, despair, or even devastation to converge with misinformation," explained technology industry analyst Susan Schreiner of C4 Trends. "It demonstrates how volatile the current economic situation has become, given that the posts originated from an unconfirmed statement first spread on X.
This erroneous information then reached CNBC and Reuters, spreading across social media platforms like wildfire," added Schreiner. "Although unverified, the positive headline was quickly absorbed by investors, many of whom use algorithmic software to analyze information for buy or sell signals, causing stocks to soar and reversing an earlier massive sell-off. The move resulted in trillions in gains in stock market value in a matter of minutes.
" Few would likely trust a random comment from a stranger made on the street. Yet, that isn't often the case on social media, where a legitimate sounding account – in this case Walter Bloomberg – posts a headline that is taken as gospel by other users. This isn't limited to stocks either.
"Social media has a significant impact on users, especially those who spend enough time on these platforms. That impact can be measured in choices users make in other aspects of their lives, including stock market decisions. We have been seeing this phenomenon in real time.
Although there are a variety of reasons why the stock market is performing so poorly, social media platforms are wild cards that should not be ignored," said Dr. Julianna Kirschner, lecturer in the Annenberg School for Communication and Journalism at the University of Southern California. "In the current environment, there’s a lot of fear and uncertainty.
It would seem that people in the financial and investment community were living in 'hope-ville,'" added Schreiner. All too often, misinformation and disinformation can run rampant on social media, as it allows rumors to also grow legs more than they would otherwise. "Users primed for the rumor's message will assist in its spread," added Kirschner.
Moreover, even those who disagree with the premise and engage with the rumor-based content may do more harm than good, because such posts can serve as rage bait for them warned Kirschner. The negativity can in turn make some who were skeptical believe it because the original poster came under attack. "The fact is that users will engage with exploitative content like this because they feel compelled to respond one way or another," Kirschner continued.
"Social media users who spend time on these platforms frequently tend to engage more often. No matter how surface-level these measures might be, likes, shares, and comments are currency in social media spaces. When rumors like those regarding the stock market flourish on social media – through likes, shares, and comments – more users will be exposed to the content, and the spread continues.
Around and around we go." In the case of misinformation about stocks, it can create wild shifts in a way that hasn't been seen before. That a single unvetted post created such a surge is notable, and it is possible some people made money while others lost their proverbial shirt! "The stock market is ultimately dependent on the social and cultural discourse of the time.
When that discourse is fractured, as we can see in social media, the stock market will suffer as well," said Kirschner. "The stock market is only catching up to some of the issues that have been present on social media for years." The White House's quick dismissal of it being "Fake News" also didn't help matters, and it only sent the stocks plunging.
And that may be a reminder that there is a vast difference between free speech and the truth, and that the latter is subject to interpretation. "Those who believe in the truth should be concerned that this was an example of positive news giving hope to those in despair, and justification through conspiracy purveyors that there's positive news from moving markets despite the pain or crashing the world's greatest economy," said Schreiner. "Watching the rumors and the stock market's attendant reaction to those online rumors is like watching a herd of sheep responding to stimuli unavailable to the human ear," warned Susan Campbell, distinguished lecturer in the Communication, Film and Media Studies Department at the University of New Haven.
"This is one of those cases, I think, where our love of freedom of speech is not equaled by our love of accurate speech.".
