Microsoft and CrowdStrike shares tumble amid global IT outage
After the cybersecurity incident, Microsoft and CrowdStrike shares recorded declines. However, the more serious sell-off concerns only the latter company. Other firms are also losing, which experts link to unofficial rumours about Joe Biden potentially withdrawing from running for re-election.
The global IT system failure, which affected many sectors of the economy, including airlines, triggered a market reaction. After trading began in New York at around 9:30 AM ET, it was clear that the incident caused declines in the shares of some tech giants on Wall Street. Market experts, however, claim that the reasons for the declines are complex.
According to MarketWatch, American stock exchanges started the day with declines, as investors also reacted to reports that President Joe Biden may soon withdraw from the re-election race.
Microsoft and CrowdStrike losing. Shares down
Particularly affected were the shares of CrowdStrike, whose cybersecurity product failed in the morning. Shares lost as much as 11 percent in value. Microsoft, affected by issues with its Azure services and Microsoft 365 suite, noted a nearly 4 percent drop.
Before the market opened - during so-called pre-market trading - the situation looked even worse. CrowdStrike shares recorded a drop of 18.67 percent. The concern of investors seems justified, as the cause of the global outage turned out to be a security update provided by CrowdStrike.
The outage affected institutions worldwide, including major banks, media, and airlines. There were grounded planes and halted broadcasts in television studios. The London Stock Exchange reported problems with the RNS information service.
CrowdStrike admits fault
George Kurtz, CEO of CrowdStrike, addressed the situation on the X platform (formerly Twitter). He emphasized that the company is actively working to resolve the issue, which affected Windows without impacting Mac and Linux systems. Kurtz assured that "this is not a security incident or cyberattack," and the problem has been identified and resolved.
Microsoft confirmed that it is aware of the issue affecting Windows devices caused by an update from an external software supplier. A company spokesperson assured that a solution is imminent.
European exchanges also affected
The outage involved CrowdStrike's Falcon Sensor product, which uses cloud technology to prevent cybersecurity breaches. On July 15, CrowdStrike announced the introduction of CrowdStrike Falcon Complete Next-Gen MDR, a solution to prevent breaches with unprecedented speed and precision across the enterprise's entire operational area.
Market experts emphasize that the server outage has seriously damaged Microsoft's reputation. This incident has highlighted how dependent the global economy is on the technology of a single enterprise and the risks associated with such concentration.
The Microsoft server outage caused a domino effect in global financial markets. European stock indices, including FTSE, CAC, and DAX, recorded declines. The negative trend was also visible in Asian markets - the Hang Seng and Taiwanese indices closed in the red.
