Key Points
- Major brokerage apps, including Fidelity, Schwab, Vanguard, and Robinhood experienced outages on a crucial trading day.
- The outages coincided with a significant market downturn fueled by recession fears and weak economic data.
- Brokerages like E*TRADE and Interactive Brokers also faced technical issues, affecting thousands of users.
On Monday, online services at major brokerages experienced significant outages, frustrating investors attempting to trade during a volatile market downturn. The outages came on a day when Wall Street’s indexes plummeted, driven by fears of a U.S. recession, weak economic data, and lackluster second-quarter earnings from technology giants.
According to outage tracking website Downdetector.com, most of the major brokerage firms were experiencing outages:
Downdetector tracks outages by aggregating status reports from multiple sources, including users.
The technical issues with Schwab and Fidelity were confirmed by the companies, though they did not provide specific details about the causes. Bouts of extreme market volatility can sometimes overwhelm trading platforms, leading to technical disruptions. This raises questions about the capacity of brokerages to handle high volumes during critical trading periods.
Major Trading Day
Wall Street’s reaction to the economic indicators was swift and severe. Concerns about a recession were compounded by weak economic data and disappointing earnings from major technology firms. Geopolitical tensions further dampened market sentiment, making investors jittery and prompting many to offload risky assets, including stocks and cryptocurrencies.
As a result, the market was down over 2% in the first minutes of trading.
In addition to Schwab, Fidelity, and Vanguard, Robinhood, E*TRADE, and Interactive Brokers also faced technical issues.
Earlier in the day, Robinhood reported a pause in its overnight trading services but later announced the resumption of these services. Robinhood allows users to trade select stocks and exchange-traded funds around the clock, making it a favorite among retail investors.
Schwab was still displaying a message warning users as of 8:45am Pacific time:
The recent outages underscore the vulnerabilities in the system, especially during periods of high market stress.
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