On Friday, a significant technological disruption impacted services across various sectors, including airlines, banks, and the London Stock Exchange. The incident was triggered by a failure in a widely-used cybersecurity program, coupled with issues reported by Microsoft regarding its cloud services.
Cybersecurity firm CrowdStrike warned that its Falcon Sensor threat-monitoring product was causing crashes in Microsoft's Windows operating system. The exact cause of the disruption remains unclear, but it coincided with outages in Microsoft’s Azure cloud and 365 office software services. As a result, global equities fell, and US futures were mixed due to the potential escalation in megacap technology stock pullbacks. Microsoft shares dropped despite resolving the cloud-services outage, and CrowdStrike slid as much as 14% in premarket trading. Major airlines, including United and Delta, also saw their shares fall.
Growing Expectations for Federal Reserve Rate Cut in September
Hopes are rising that the Federal Reserve will cut interest rates in September as officials express increasing confidence that price stability is within reach. Recent speeches by Fed officials have laid the groundwork for this potential move, with Chair Jerome Powell expected to provide further indications after the policy meeting on July 30-31.
While the rate cut is not yet a certainty, Powell and his colleagues are focused on not missing the opportunity for a soft landing for the US economy, which has shown some signs of slowing down. The anticipation of a rate cut has influenced market expectations, contributing to the mixed performance of US futures amid the broader tech disruptions.
President Biden Faces Pressure to Exit 2024 Election Race
President Joe Biden is under unprecedented pressure to withdraw from the 2024 election race, with significant portions of Washington, including top Democratic allies, viewing his exit as inevitable. Despite this, Biden and his campaign remain adamant that the president, who is currently isolating with Covid, is fully committed to running for re-election.
In contrast, former President Donald Trump officially accepted the Republican nomination at the Republican National Convention. His speech called for unity, tax cuts, and an end to foreign wars, before shifting to immigration rhetoric and America-first messages.