Wall Street’s main indexes fell on Friday, deepening a sell-off driven by tech stocks and mixed earnings, while investors assessed the impact of a global cyber outage that knocked down CrowdStrike’s shares to an over two-month low.
Cybersecurity firm CrowdStrike slumped 11.2% after an update to one of its products appeared to trigger an outage that affected customers using Microsoft’s Windows Operating System, disrupting businesses across sectors.
Major U.S. airlines ordered ground stops citing communication issues, with the Euronext exchange and London Stock Exchange Group’s Workspace news and data platform also facing issues. LSEG later said its data and services were back online.
Microsoft slipped 0.7% to an over one-month low, on track for a four-day decline, driven by a rout in tech stocks.
“Any hint of bad news, because they (tech stocks) are so priced to perfection is going to hurt these stocks, both (CrowdStrike and Microsoft) are excellent companies and are worthwhile long-term holds,” said Phil Blancato, CEO of Ladenburg Thalmann Asset Management.
Wall Street falls as investors look beyond megacap shares
The disruption comes after two grueling sessions for Wall Street, as investors assessed second-quarter earnings and a move away from megacaps that have primarily driven the equity rally in 2024.
Megacaps were largely mixed, with Nvidia and Amazon.com losing 1% and 0.5%, while Apple and Alphabet gained 1% each.
Chip stocks also struggled for direction. U.S.-listed shares of Taiwan Semiconductor Manufacturing were down nearly 1.5%, while Arm Holdings jumped 3%.
Over the past two sessions, the Nasdaq has dropped 3.5% and the S&P 500 has fallen 2.1%, keeping the indexes on track for weekly losses.
Signaling investor unease, the VIX – Wall Street’s “fear gauge” – was trading at its highest since early May.
Investors will also await comments from Federal Reserve officials John Williams and Raphael Bostic for hints on the policy path later in the day.
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