TLDR
Table of Contents
- A false news report about a 90-day tariff pause by Trump caused markets to briefly surge by $2.4 trillion before quickly crashing
- The rumor originated from a verified “Walter Bloomberg” X account (not affiliated with Bloomberg News)
- The S&P 500 spiked 8%, Nasdaq added 9.5%, and Bitcoin jumped 6.5% to $80,000 briefly
- White House quickly denied the report as “fake news,” erasing all market gains within minutes
- Analysts suggest the quick market reaction shows significant capital waiting on the sidelines ready to enter on positive news
A single false news report about U.S. tariffs sparked a dramatic market swing on April 7, briefly adding and then erasing $2.4 trillion in value within 30 minutes. The episode demonstrated how sensitive markets remain to trade policy news.
The incident began when a verified X account called “Walter Bloomberg” (not affiliated with Bloomberg News) posted that President Donald Trump was considering a 90-day pause on tariffs for all countries except China. The account claimed this information came from Kevin Hassett, one of Trump’s economic advisers.
Despite having no official connection to Bloomberg News, the account’s verified badge and 852,000 followers lent it credibility. The rumor gained traction when it was mistakenly displayed as a banner on CNBC and further amplified by Reuters.
Markets Surge Then Crash
The market reaction was swift and massive. Within minutes of the rumor circulating, the S&P 500 reversed early losses and surged 8% from its daily low. The Nasdaq jumped even higher, adding 9.5% in less than an hour, while the Dow Jones rose by 7%.
Cryptocurrency markets showed similar volatility. Bitcoin prices spiked 6.5%, briefly topping $80,000 before retreating as the news was debunked.
By 10:41 am New York time, the White House “Rapid Response” account had posted on X that the report was fake news. Markets promptly reversed course, erasing $2.5 trillion in market value within 23 minutes.
.@PressSec: Reports that @POTUS is considering a 90-day pause on tariffs are FAKE NEWS. pic.twitter.com/UfXO1BhwYW
— Rapid Response 47 (@RapidResponse47) April 7, 2025
The entire episode took place within a 30-minute window, representing the most volatile intraday swing since March 2020.
What Actually Happened
The misunderstanding appears to have stemmed from a Fox News interview with Kevin Hassett. When asked whether Trump would consider a 90-day pause in tariffs, Hassett gave a non-committal response: “I think the president is gonna decide what the president is gonna decide.”
He further added, “Even if you think there will be some negative effect from the trade side, that’s still a small share of GDP. The idea that it’s going to be a nuclear winter or something like that is completely irresponsible rhetoric.”
Far from considering a tariff pause, Trump took to his Truth Social platform shortly after the false report circulated to threaten China with even more tariffs.
“If China does not withdraw its 34% increase above their already long-term trading abuses by tomorrow, April 8th, the United States will impose additional tariffs on China of 50%, effective April 9th,” Trump posted.
Market Implications
Market analysts have pointed out that the sharp reaction reveals important insights about current market conditions.
Crypto commentator Lark Davis noted that “the market is ready to ape, even a lame 90-day delay sent markets soaring.” He suggested this shows markets are prepared to accept prolonged China negotiations as long as most trade deals can be resolved with other partners.
Stocks pumped 3 trillion on 90 day tariff pause fake news (the fake pause excluded China)
This reminds me of the fake btc etf news in 23 that then turned out to be true later
It also reveals some critical things about the market
1 market is ready to accept prolonged China…— Lark Davis (@TheCryptoLark) April 7, 2025
“Now imagine what happens when dozens of deals are made with top players ie, India, Canada, and the UK. Shit tons of money is on the sidelines, ready to ape in at a moment’s notice,” Davis added.
Other observers noted that the false headline might actually encourage the Trump administration to continue its hardline approach. X user Geiger Capital commented, “That fake headline might actually give Trump, Navarro, and Lutnick more confidence to keep pushing this further. They now know that at any point they can announce a pause and the market will rally ~10% in a single day.”
Macro analyst Alex Krüger highlighted the precarious state of market sentiment, saying, “We are one headline away from a 7% candle in either direction.”
Podcast host Felix Jauvin observed, “What’s so crazy about this crash vs other is its entirely self-willed and could be reversed in an instant on one tweet. Has there ever been anything like that?”
Despite the market turbulence, European Union Commissioner Ursula von der Leyen indicated openness to negotiation, stating, “Europe is ready to negotiate with the US,” including the possibility of zero-for-zero tariffs on industrial goods.
At the time of reporting, Bitcoin traded at around $78,824, recovering somewhat from the volatility.
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