People are getting fake news on their phones and that’s increasing the risk of a market crash

Fortune

by Nick Lichtenberg

February 24, 2026

AI-Generated Deep Dive Summary

The rise of fake news on mobile devices is creating a significant threat to global financial stability. As retail investors increasingly rely on social media and viral content for market insights, sensationalized rumors and hypothetical scenarios are driving erratic trading behavior and increasing the risk of a market crash. This disconnect between empirical data and public sentiment has left financial markets more fragile than ever, with panic-induced corrections potentially dragging down global economic growth. The recent volatility was fueled by a viral blog post from Citrini Research, which painted a grim picture of an AI-driven "Ghost GDP" where corporate output rises through automation while human consumption declines. Though framed as a hypothetical scenario, the post gained traction across social media platforms, sparking fear among investors. This phenomenon is not isolated; it reflects a broader trend where viral content—often amplified by algorithms designed to stir panic and hype—mutates into perceived reality. Experts warn that such viral narratives are increasingly influencing market behavior. Paul Donovan of UBS Wealth Management highlights the growing gap between economic realities and public perception, emphasizing how sensationalized media on smartphones shapes investor judgment. Similarly, Mark Zandi of Moody's Analytics points out that markets are becoming more speculative, with falling asset prices threatening an already vulnerable economy. The risks extend beyond individual investments to global economic stability. The recent "SaaSpocalypse" event, where $2 trillion in software-as-a-service valuations were wiped out due to fears about AI advancements, underscores how quickly viral panic can translate into significant market losses. Even a single social media post from the president or a Nobel Prize-related rumor can send markets into turmoil, as seen in recent stock sell-offs. In an era where retail investors wield unprecedented influence and algorithms amplify sensational content, the line between fact and fiction is blurring. This threatens to create a feedback loop where market fragility feeds on itself, potentially fracturing key economic sectors like residential mortgages. As experts warn, the increasing prevalence of "tail risks" and speculative markets could lead to a significant economic downturn, making it crucial for investors to distinguish between sensationalism and reality. The modern economy is at risk of being destabilized by the very tools that connect us—our smartphones. The convergence of deep uncertainty about technology, inexperienced retail investors, and algorithms engineered for panic creates a volatile mix that could have far-reaching consequences for global growth and stability.

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Originally published on Fortune on 2/24/2026