Investors keep a distance from Crowdstrike
Deadly global system failures and disruptions put pressure on IT security firm Crowdstrike, causing a dip in their stock price. Meanwhile, robot delivery companies see a significant surge.
Continuous losses in tech stocks and a worldwide massive IT disruption weighed on Wall Street. The Dow Jones Industrial Average closed down 0.9% at 40,287 points. The broader **S&P 500 lost 0.7% to 5505 points, and the Nasdaq Composite 0.7% to 17,726 points. For the week as a whole, the Dow gained 0.8%, while the S&P 500 lost 2%, and the Nasdaq 3.7%.
Multiple airlines, media companies, banks, and telecom firms reported system failures and disruptions on Friday. Trading platforms also experienced issues, with some customers temporarily unable to trade. A trader in London reported that several trading platforms had problems.
The cause was an update from Cybersecurity software company Crowdstrike, which caused Windows applications from Microsoft to crash. Crowdstrike shares dropped 11.1%, and Microsoft lost 0.7%. However, cybersecurity stocks like SentinelOne and Palo Alto Networks saw gains of 7.1% and 2.1%, respectively.
Tech selloff continues
Investors were already jittery due to profit-taking in tech stocks, said Ben Laidler, equity strategist at Bradesco BBI. "And this global outage adds to the uncertainty." The Philadelphia Semiconductor Index fell by 3.1%. A weaker-than-expected inflation rate at the beginning of July and growing expectations that Donald Trump would win the US presidential elections were the triggers for a broad selloff of growth-dependent technology companies, said Jake Manoukian, head of US investment strategy at JP Morgan Private Bank.
On the other hand, investors bought up shares of Serve Robotics after Nvidia disclosed its investments in the robot delivery company. The stock nearly tripled in value, reaching $7.55 per share. According to documents filed with the US Securities and Exchange Commission, Nvidia had been buying shares and converting bonds into stock since the previous summer, giving it ownership of 3.7 million shares or about 10% of the company.
Corsair plunges to record low
Meanwhile, Corsair, the supplier of special keyboards and mice for computer gamers, saw its shares plummet. The stock dropped 16.5% to $8.12 in the wake of the news. The demand for high-end gaming PCs remained weaker than expected, according to CEO Andy Paul, as consumers waited for new GPU processors that wouldn't hit the market until the end of the year.
Concerns over economic downturns sent copper prices tumbling by about 5% on the week. Disappointment over the lack of details about further stimulus measures at the Communist Party's plenum in China left many investors worried about weak demand from the world's largest metal consumer, as China's economic growth had recently fallen short of expectations.
The price of Brent crude oil dropped 2.4% to $82.69 per barrel, while US light crude oil (WTI) fell 3.1% to $80.26. Traders reported decreasing supply concerns as investors grew more cautious, with many putting their bets on a ceasefire in the Gaza Strip.
All events around the stock exchange can be reviewed again in the "Stock Exchange Day".
The tech selloff on Wall Street continued, with the Dow Jones Industrial Average and other major indexes experiencing losses. Crowdstrike shares dropped 11.1% following an issue with their cybersecurity software, affecting Windows applications. Meanwhile, investors saw potential in robot delivery company Serve Robotics after Nvidia disclosed its investments, causing the stock to nearly triple in value.
