An image of black smoke billowing next to a bureaucratic-looking building spread across social media Monday morning, with the claim that it showed an explosion near the Pentagon.

The posts sent a brief shiver through the stock market and were quickly picked up by news outlets outside the US, before officials jumped in to clarify that no blast actually took place and the photo was a fake.

Experts say the viral image had telltale signs of an AI-generated forgery, and its popularity underscores the everyday chaos these now increasingly sophisticated and easy-to-access programs can inflict.

Police and fire officials in Arlington, Virginia, say the image is not real and there was no incident at the US Department of Defense headquarters across the Potomac from the nation’s capital.

Despite this, the image and claim was spread by outlets including RT, a Russian government-backed media company formerly known as Russia Today. It was also widely shared in investment circles, including an account bearing Twitter’s signature blue verification check mark that falsely suggested it was associated with Bloomberg News.

“Reports of an explosion near the Pentagon in Washington DC,” the Russian state news agency wrote in a since-deleted tweet to its more than three million followers.

The timing of the fake image, which appeared to spread widely just after the US stock market opened for trading at 9:30 am, was enough to send a ripple through the investment world.

The S&P 500 briefly dropped a modest 0.3 per cent as social media accounts and investment websites popular with day traders repeated the false claims.

Other investments also moved in ways that typically occur when fear enters the market. Prices for US Treasury bonds and gold, for example, briefly began to climb, suggesting investors were looking for someplace safer to park their money.

The image’s rapid spread prompted the Arlington County Fire Department to take to social media to knock down the rumors.

“@PFPAOfficial and the ACFD are aware of a social media report circulating online about an explosion near the Pentagon,” the agency wrote, referring to the acronym for the Pentagon Force Protection Agency that polices the Pentagon. “There is NO explosion or incident taking place at or near the Pentagon reservation, and there is no immediate danger or hazards to the public.”

Captain Nate Hiner, a spokesperson for the fire department, confirmed the agency’s tweet was authentic but declined to comment further, deferring to the Pentagon police force, which didn’t respond to email and phone messages.