Futures fall amid tech rout, traders grapple with global cyber outage
For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window.
Futures down: Dow 0.31%, S&P 500 0.24%, Nasdaq 0.37%
July 19 (Reuters) -U.S. stock index futures fell on Friday, as traders shifted out of expensive megacap technology stocks, while assessing the impact of a worldwide tech outage that hit businesses across sectors.
Major U.S. airlines ordered ground stops citing communications issues, while firms including some financial services and banks reported system outages that disrupted their operations.
Microsoft MSFT.O fell 2.7% in premarket trading after the cloud disruption.
CrowdStrike Holdings CRWD.O slumped 19% after the Australian government said some outages in the country appeared to be linked to an issue at the company.
The disruption comes after a grueling two sessions for Wall Street, as investors assessed second-quarter earnings and a move away from megacap tech stocks that have primarily driven the equity rally in 2024.
Other megacaps such as Nvidia NVDA.O and Apple AAPL.O fell 0.9% and 0.3%, respectively. Chip stocks were mixed in premarket trading, with the U.S. listing of Taiwan Semiconductor Manufacturing TSM.N down 1.8%, while Broadcom AVGO.O rose 0.10%.
London Stock Exchange Group's LSEG.L Workspace news and data platform was also hit by the outage, affecting user access worldwide and leading to disruptions across financial markets, while Euronext said some North American stocks-based indices were being broadcast incorrectly.
"There is chatter that cybersecurity firm Crowdstrike ran an update which didn’t work on Microsoft’s operating system and that caused systems to fall over. Given we don’t know the full details, it’s too early for investors to work out the financial or reputational impact to these businesses," said Dan Coatsworth, investment analyst at AJ Bell.
Over the past two sessions, the Nasdaq Composite .IXIC has fallen 3.5%, the benchmark S&P 500 .SPX lost 2.1% and the Russell 2000 .RUT snapped a five-day winning streak on Wednesday.
Signaling investor unease, the VIX .VIX, Wall Street's "fear gauge", was trading above 16 points - its highest since late April.
Corporate earnings are also on deck. Reports from American Express AXP.N, The Travelers Companies TRV.N and Halliburton HAL.N are expected before markets open on Friday.
Investors will also await comments from U.S. Federal Reserve officials John Williams and Raphael Bostic for hints on the monetary policy path later in the day.
Markets have broadly priced in a 25-basis-point interest-rate cut by the Fed's September meeting and still expect two cuts by the year-end according to LSEG data.
At 5:26 a.m. ET, Dow e-minis 1YMcv1 were down 128 points, or 0.31%, S&P 500 e-minis EScv1 were down 13.5 points, or 0.24%, and Nasdaq 100 e-minis NQcv1 were down 73.25 points, or 0.37%.
Cybersecurity companies including Palo Alto Networks PANW.O, Fortinet FTNT.O and Zscaler ZS.O rose between 1.4% and 6.3% after the global disruption.
Among single movers, Netflix NFLX.O fell 1.6% after the streaming giant cautioned that third-quarter subscriber gains would be lower than a year earlier and forecast Q3 revenue below estimates.
Reporting by Lisa Mattackal in Bengaluru; Editing by Pooja Desai
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
