Heaven and Hell in 15 Minutes... New York Stock Exchange Swayed by Fake News

'Tariff Delay' Fake News Spreads Briefly

Dow Jones Index Soars Nearly 2600 Points

White House Confirms "Fake News"

Nasdaq Closes with Rebound on Hopes of Negotiation

On the 7th (local time), it took less than 15 minutes for investors on New York's Wall Street to go from heaven to hell. About 30 minutes after the New York Stock Exchange opened that day, news quickly spread through social media on Wall Street that "the Trump administration is delaying the imposition of reciprocal tariffs for 90 days."

The Dow Jones Index soared 2595 points from the intraday low to the high in an instant. The S&P500 Index also surged from the early opening level of 4800 to 5,246.57. However, the New York Stock Exchange fell sharply after the White House announced that it was "fake news."

Experts evaluated that this incident showed how extremely sensitive market sentiment is, as a surge occurred due to unverified news even after a massive sell-off.

White House "Fake News"

The New York Stock Exchange showed a record rollercoaster market that day. Due to fake news, the Dow Jones Index recorded the largest daily fluctuation in history. Investors who were aiming for bottom fishing amid recent consecutive declines reacted sensitively when positive news related to tariff policy was heard. In just over 10 minutes, the Nasdaq Index rose more than 10% compared to the intraday low. The S&P500 Index recovered about $2.5 trillion in market capitalization in just 7 minutes. The trading volume for the day alone was about 29 billion shares, the highest since 2007.

The Wall Street Journal (WSJ) reported that fake news may have occurred in the process of inaccurately summarizing the interview remarks of Kevin Hassett, chairman of the White House National Economic Council (NEC). Chairman Hassett appeared on Fox News that day and was asked if a '90-day delay would be considered,' to which he replied, "President Trump will decide what he wants to decide." This content was mistranslated as "a 90-day tariff delay" and spread through social media, and CNBC's erroneous report as if it were true stimulated investors.

However, as the content lacked accurate grounds, stock prices began to fall again, and the incident ended when the White House confirmed it as "fake news" around 10:41.

Bloomberg evaluated this as "a case that clearly shows how extremely the market's fate can be divided if President Trump continues to push the trade war."

Mystery of the Rebound Close

Although the fake news caused the three major indices of the New York Stock Exchange to fall again, they showed strong buying pressure compared to the opening time and closed at a level similar to the previous day. The Dow Jones Index closed at 37,965.60, down just 349.26 points (-0.91%) from the previous trading day. The S&P500 Index also closed slightly down (-0.23%) at 5,062.25. The Nasdaq Index ended trading at 15,603.26, up 15.48 points (0.10%) from the previous trading day.

Despite the 'tariff delay' being fake news, the New York Stock Exchange reacted this way because the Trump administration showed signs of leaving the possibility of negotiations with trading countries open. President Trump himself said at a press conference with Israeli Prime Minister Benjamin Netanyahu at the White House that day, "There could be permanent tariffs, and there could also be negotiations," adding, "because we need things beyond tariffs themselves." U.S. Treasury Secretary Scott Besant also stated, "70 countries hope for tariff negotiations."

Low-price buying also flowed in. Although the tariff risk is significant, it was anticipated that the New York Stock Exchange could rebound if negotiations with some countries are successfully concluded before the reciprocal tariffs are implemented on the 9th. In fact, the rebound in the Nasdaq Index was also led by large technology stocks. The stock price of Nvidia, a leading artificial intelligence (AI) company, rose 3.53%, and the stock prices of Amazon and Meta Platforms also rose 2.49% and 2.28%, respectively.

New York = Park Shin-young, Correspondent nyusos@hankyung.com