Shares in Europe and Asia dipped on Friday following a rough day on Wall Street that pulled down U.S. stocks. Across the globe, widespread IT outages created disruptions in travel and communications, leading to flight cancellations and delays. Cybersecurity firm CrowdStrike stated that the problem causing the outages was not due to a security breach or cyberattack and that a solution was in the works. Nevertheless, the turmoil persisted and escalated even after hours of the issue being identified, causing CrowdStrike’s Nasdaq shares to drop by 12% in premarket trading.
In European markets, Germany’s DAX slipped by 0.7%, the CAC 40 in Paris declined by 0.6%, and London’s FTSE 100 shed 0.5%. In the U.S., futures for the S&P 500 and the Dow Jones Industrial Average were slightly lower. Asian benchmarks saw declines of over 2% in Hong Kong and Taiwan, with concerns lingering about China’s strategies to stimulate its slowing economy.
Chinese officials revealed details in Beijing about a high-level Communist Party meeting outlining plans for China to become a technology leader, enhance its financial markets, and improve living standards. However, the specifics remained vague, with more information anticipated in the coming weeks.
In stock markets, Hong Kong’s Hang Seng fell by 2%, while the Shanghai Composite index managed a 0.2% gain. The Nikkei 225 in Tokyo decreased by 0.2%, South Korea’s Kospi dropped by 1%, and Australia’s S&P/ASX 200 lost 0.8%. The SET index in Bangkok also declined by 0.6%, and Taiwan’s Taiex fell by 2.3%, driven by Taiwan Semiconductor Manufacturing Co. shares dropping 3.5% due to reports of increased restrictions on sales to China.
Tech sector woes this week have led to declines in U.S. and Asian markets after a period of robust growth. On Thursday, the S&P 500 and Dow fell by 0.8% and 1.3%, respectively, while the Nasdaq sank by 0.7%. Reports on the U.S. economy were mixed, with a rise in unemployment benefit applications potentially indicating a softening job market, though manufacturing in the mid-Atlantic region showed stronger growth than anticipated. Anticipation of the Federal Reserve possibly adjusting interest rates in September, and hopes for continued corporate profit growth have affected market sentiments.
In early trading, U.S. benchmark crude oil decreased to $80.96 per barrel, while Brent crude dropped to $84.92 per barrel. The U.S. dollar strengthened against the Japanese yen but weakened against the euro.
World stock market declines due to technology sector slump on Wall Street
