U.S. stock index futures were frozen on Friday after an outage at CME Group brought trading in currencies, commodities and equities futures to a standstill around the world, leaving investors flying blind ahead of a shortened trading session.
CME, the world’s largest exchange operator, first posted about the outages at 9:40 p.m. ET on Thursday on its website and said the problem was a cooling issue at its CyrusOne data centers.
CME’s stock futures offerings linked to the S&P 500, the Nasdaq 100 and the Dow Jones Industrial Average are typically heavily traded before U.S. markets open, with investors relying on them to gauge trends and directions. All of them showed their last trade at 09:44 p.m. ET on Nov. 27.
“Beyond the immediate risk of traders being unable to close positions – and the potential costs that follow – the incident raises broader concerns about reliability,” said Axel Rudolph, senior technical analyst at trading platform IG.
“In some respects, CME was fortunate the failure occurred during the low-liquidity Thanksgiving weekend in Asian hours rather than during peak U.S. trading.”
Market volumes are expected to be light following the Thanksgiving holiday. Investors instead looked to exchange-traded funds tracking Wall Street’s main indexes as a gauge for broader market mood.
In premarket trading, SPDR’s S&P 500 ETF was up 0.3 per cent and Invesco’s QQQ Trust tracking the Nasdaq climbed 0.4 per cent, while a fund tracking the blue-chip Dow edged up 0.2 per cent with light trading volumes.
Traders warned of a potential spike in volatility once the outage is resolved, a situation likely to be worsened by low liquidity during the holiday-shortened trading week. Markets will close at 1 p.m. ET.
While index futures were halted, shares of U.S.-listed companies appeared to be trading normally in premarket trading.
Shares of CME Group were down about 0.8 per cent in light volumes.
Retailers in focus as holiday shopping kicks off
This week also kicked off the holiday shopping season, starting with Thanksgiving on Thursday, Black Friday and Cyber Monday – crucial days of sales for big-box retailers.
Online sales on Thursday alone are expected to rise six per cent from last year’s level to reach $8.6 billion, data from Salesforce showed, as retailers offer steep discounts to lure shoppers amid tariff woes and a slew of corporate layoffs.
Retail giant Walmart edged up 0.2 per cent and Amazon.com rose 0.7 per cent, while other consumer-related companies such as Nike and Coty were marginally higher.
Wall Street was also heading into the last trading session of the month, which was marked by worries about an AI bubble as valuations get stretched and tech behemoths spend billions to scale up infrastructure.
December fed rate cut bets rise
Traders also struggled to gauge the Federal Reserve’s next monetary policy move as they took stock of a barrage of delayed government data and mixed views by policymakers on interest rates.
However, dovish remarks in recent weeks from some influential Fed officials doubled the bets of a 25-basis-point rate cut in December to 84.7 per cent, according to the CME Group’s FedWatch Tool.
The S&P 500 and the Dow are poised for their steepest monthly declines since April and the Nasdaq its biggest since March.
(Reporting by Johann M Cherian, Shashwat Chauhan, Purvi Agarwal in Bengaluru; Editing by Saumyadeb Chakrabarty)