Fake AI Photo of Pentagon Blast Went Viral, Tripped Stocks (1)

A falsified photograph of an explosion near the Pentagon spread widely on social media Monday morning, briefly sending US stocks lower in possibly the first instance of an AI-generated image moving the market.

Just past 10 a.m. New York time, when the photo was circulating, the S&P 500 declined by about 0.3% to a session low. As news emerged that the image was a hoax, the index quickly rebounded.

The fake photo, which first appeared on Facebook, showed a large plume of smoke that a Facebook user claimed was near the US military headquarters in Virginia.

It soon spread on ...