Tech
Stocks fall, crypto rises as CrowdStrike technology outage pushes Wall St fear gauge to recent high
NEW YORK, July 20 — World stock indexes fell yesterday as a global computer outage jolted investors by disrupting trading across several sectors, while the dollar rose along with Treasury yields.
The S&P 500 and Nasdaq posted their biggest weekly percentage drops since April.
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The disruption affected services ranging from airlines to banks to healthcare.
Cybersecurity firm CrowdStrike fell 11.1 percent after an update to one of its products appeared to trigger the outage that hit customers using Microsoft’s Windows operating system, disrupting business across the board. Microsoft closed down just 0.7 percent.
The Cboe Volatility Index, Wall Street’s “fear gauge,” hit its highest level since late April.
“Today’s disruptions are a reminder that services can have supply chain disruptions, too,” said Jeff Kleintop, chief global investment strategist at Charles Schwab. “While not a cyberattack, the disruption is a troubling reminder of how deeply integrated our systems are.”
The Dow Jones Industrial Average fell 377.49 points, or 0.93 percent, to 40,287.53, the S&P 500 lost 39.59 points, or 0.71 percent, to 5,505.00 and the Nasdaq Composite lost 144.28 points, or 0.81 percent, to 17,726.94.
MSCI’s gauge of stocks across the world fell 6.58 points, or 0.80 percent, to 810.87. The STOXX 600 index fell 0.77 percent.
Investors have also been bracing for major results in the U.S. second-quarter earnings season in the coming weeks. Megacap results will be in focus, with the S&P 500 technology sector down 5.1 percent this week, as investors have moved into sectors that have languished so far in 2024.
Tesla and Google parent Alphabet are both set to report on Tuesday, kicking off the “Magnificent Seven” group of megacap stocks that have powered markets since early 2023. Microsoft and Apple are both scheduled to report results the following week.
The dollar recovers
The dollar index rose and was on track for its first weekly gain in three weeks, bouncing on recent U.S. economic data and concerns about technology disruption.
The dollar index, which measures the dollar against a basket of currencies including the yen and the euro, rose 0.21% to 104.36, with the euro falling 0.14% to $1.0881.
Against the Japanese yen, the dollar strengthened by 0.06% to 157.46.
The Federal Reserve is expected to announce its next monetary policy at the end of July.
According to the CME’s FedWatch tool, markets are only expecting a slim chance of a rate cut of at least 25 basis points (bps), while they are almost fully pricing in a cut at the September meeting.
U.S. Treasury yields rose as investors awaited new data next week.
The yield on the benchmark 10-year U.S. bond rose 5.5 basis points to 4.243% from 4.188% on Thursday evening.
Oil prices fell as investors kept an eye on a possible ceasefire in Gaza. U.S. crude fell $2.69 to $80.13 a barrel, while Brent crude fell $2.48 to $82.63.
In cryptocurrencies, bitcoin gained 5.11 percent to $67,083.35. — Reuters