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Markets

The S&P 500 experienced its worst week since April, with investors retreating from Big Tech stocks. CrowdStrike saw a decline due to causing a global IT outage, which had a negative impact.

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Tech

Global Tech Outage

Pour a Red Bull out for the IT workers of the world: After feverish system rebooting, industries from travel to healthcare are recovering from what is being called the largest IT outage ever.

In case you've been out of the loop... countless organizations worldwide were paralyzed for several hours yesterday after the cybersecurity firm CrowdStrike issued a routine software update to Microsoft Windows customers. Unfortunately, the update contained a defect that potentially afflicted millions of computers with the blue screen of death, giving some workers an unexpected long weekend ("Thank you Microsoft for an early vacation" trended on Weibo in China, the Financial Times reported).

CrowdStrike and Microsoft quickly released a fix to help businesses begin to return to normal, but not before the bug caused chaos in:

• Travel: The big three US airlines—United, Delta, and American—grounded flights in the early hours. By 5pm, approximately 9,200 flights entering or leaving the US were delayed out of 38,000 affected worldwide, and around 2,650 US flights were canceled out of 4,200 globally, according to FlightAware data. Some airlines resorted to handwriting boarding passes or flight updates.

• Banks: Some traders at JPMorgan Chase, UBS, Bloomberg, and other financial institutions couldn't execute orders yesterday morning. One unnamed senior trader told the FT that it was "the biggest upset in years."

• Healthcare: Many hospitals, including some of the largest in Europe and the US, were forced to cancel all elective operations, routine appointments, and walk-ins, and online portals for most UK general practitioners went down.

• Governments: The Dutch and UAE foreign ministries reported IT outages. In the US, downed computer systems delayed trials—including Harvey Weinstein's—by hours, disrupted customs, and temporarily interrupted some 911 services.

• Chain Restaurants: Starbucks mobile ordering crashed (Dunkin' persisted), and McDonald's Japan closed nearly a third of its stores for the day.

Looking ahead, it's not yet clear how the supply chain will be impacted by the outage, which caused already strained freight hubs to pause shipping operations for a few precious hours. Cargo ports largely resumed operations after a chaotic morning, but experts warn that getting air shipping fully back on track could take days or weeks.

Politics

Biden is Staying in The Race as More Democrats Say To Get Out

Biden's campaign insists he’s staying in the race despite growing calls from Democrats for him to step down. “Joe Biden has made it more than clear: he’s in this race and he’s in it to win it,” the president’s reelection campaign emphasized in a memo yesterday, adding that there is no plan for an alternative Democratic nominee. The White House also denied reports that the president and his family are planning an exit strategy. However, pressure is mounting as questions persist about the octogenarian's age and his ability to defeat Donald Trump. Yesterday, at least 13 more Democratic members of Congress urged him to step aside, and donors continue to push for a change.

International

Russia Sentences Evan Gershkovich For 16 Years

A Russian court has sentenced Wall Street Journal reporter Evan Gershkovich to 16 years in prison for espionage following a three-day closed trial, where the charges were widely deemed baseless.

WSJ Publisher Almar Latour and Editor-in-Chief Emma Tucker condemned the verdict as a “disgraceful, sham conviction” in a joint statement. The State Department has classified Gershkovich as wrongfully detained, while international media NGOs accuse Russia of suppressing freedom of expression and engaging in geopolitical hostage-taking.

Gershkovich was arrested during a reporting trip to Yekaterinburg in March 2023, while covering Russia amid its war in Ukraine. He was indicted on accusations of gathering intelligence about a Russian defense contractor for the CIA.

What's next? President Biden and Secretary of State Antony Blinken have stated that the government will continue efforts to secure Gershkovich's release, who has been imprisoned for over a year. US and Russian officials are reportedly negotiating a deal to bring Gershkovich home. President Vladimir Putin has suggested that Russia might consider a prisoner swap involving its security agent Vadim Krasikov, who is serving a life sentence for murder in Germany.

This possibility seems more feasible now, as Russian officials had emphasized that a prisoner exchange could only occur after Gershkovich's sentencing.