You can squash a bug but not a rumor. The action that is applied to a rumor, idea, revolt, or an indictment is quash not squash. Maybe you can squash a pumpkin, akin to smashing it, but you can’t squash a panic – unless you’re desperate for a pun:

The pumpkin paucity panic is squashed

However, you can quash a beef, if  ”beef” is synonymous with “quarrel”.

Wu-Tang Clan/ Slaughterhouse Beef Quashed At Rock The Bells

I won’t argue with that.