U.S. Stocks Move Modestly Lower Following Widespread IT Outage

After initially showing a lack of direction, stocks have moved modestly lower over the course of the trading session on Friday. The major averages have all moved to the downside, with the Nasdaq and the S&P 500 extending the sharp pullback seen over the two previous sessions.

Currently, the major averages are just off their lows of the session. The Dow is down 243.83 points or 0.6 percent at 40,421.19, the Nasdaq is down 43.81 points or 0.3 percent at 17,827.41 and the S&P 500 is down 10.51 points or 0.2 percent at 5,534.08.

With concerns about the outlook for tech stocks recently weighing on Wall Street, negative sentiment may have been generated by a major IT outage.

The operations of major banks, media outlets, hospitals and airlines worldwide were affected due to the widespread outage, which was purportedly caused by an update by cybersecurity firm CrowdStrike (CRWD).

“CrowdStrike is actively working with customers impacted by a defect found in a single content update for Windows hosts,” the company’s CEO George Kurtz said on X. “Mac and Linux hosts are not impacted.”

“This is not a security incident or cyberattack,” he continued. “The issue has been identified, isolated and a fix has been deployed.”

Shares of CrowdStrike have tumbled by 9.8 percent, while shares of Microsoft (MSFT) have also moved to the downside as many of the software giant’s users have also been impacted by the issue.

“The underlying cause has been fixed, however, residual impact is continuing to affect some Microsoft 365 apps and services. We’re conducting additional mitigations to provide relief,” Microsoft said on X.

Overall trading activity remains somewhat subdued, however, with a lack of major U.S. economic keeping some traders on the sidelines.

Sector News

Semiconductor stocks have come under pressure over the course of the session, with the Philadelphia Semiconductor Index slumping by 1.9 percent to its lowest intraday level in over a month.

Notable weakness has also emerged among computer hardware stocks, as reflected by the 1.0 percent loss being posted by the NYSE Arca Computer Hardware Index. The index has also hit a one-month low.

Gold, steel and networking stocks have also moved to the downside on the day, while some strength is visible among pharmaceutical stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan’s Nikkei 225 Index dipped by 0.2 percent, while Hong Kong’s Hang Seng Index tumbled by 2.0 percent.

The major European markets have also moved to the downside on the day. While the German DAX Index is down by 0.8 percent, the French CAC 40 Index is down by 0.6 percent and the U.K.’s FTSE 100 Index is down by 0.5 percent.

In the bond market, treasuries are extending the pullback seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 4.8 basis points at 4.236 percent.

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