Tech Outage Hits Stock Market Right Where It Hurts
Major shutdowns and service disruptions occurred across the globe last night and tis morning due to tech issues.
The US stock market was high for much of the week, even breaking records, with all three major indices performing very well. On Thursday evening, a tech crisis occurred.
A new update to Microsoft 365 was pushed onto the office suite by third party CrowdStrike, and it caused systems around the world to experience difficulties and even shut down. Hospitals, airlines, and banks took some of the greatest damage, with many of them closing down or having to switch to manual input for several hours.
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Microsoft quickly became aware of the issue and sent out a fix for the problem, letting media sources know that the tech issue was not a hack or a security breach. Many of the affected systems are still down, and the crisis has had a knock-down effect on the stock market.
Ahead of Friday’s opening bell, all three major stock indices are low, with the Dow Jones Industrial Average having fallen 1.29% from the previous day. The Nasdaq Composite declined by 0.70%, and the S&P 500 fell 0.78%. Â
How the Outage Could Affect Markets Today
Even if Microsoft’s fix for the problem goes into effect across all systems that have been hit and acts quickly, much of the damage has already been done. Many major companies that relied on the technology will be recovering for weeks, and their stock will take a hit.
Airlines have had to reimburse passengers, and medical services have had to reschedule many of their patients. This kind of major technical problem will have long-lasting repercussions, and the stock market will be one of the most obvious indicators of how quickly these companies are recovering.
Many tech-focused companies will be suffering the most, so we expect the tech-heavy Nasdaq to bear the brunt of the event. CrowdStrike saw its shares drop 15%, and we may see similar drops from Microsoft (currently down 1.57%) and other tech companies caught up in the drama. Expect this to have an impact on the tech stocks and the larger stock market for the next few weeks.Â
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