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- On a crucial trading day, major broker apps including Fidelity, Schwab, Vanguard and Robinhood experienced outages.
- The defaults coincided with a significant market downturn fueled by recession fears and weak economic data.
- Brokers such as E*TRADE and Interactive Brokers also struggled with technical issues that affected thousands of users.
Major brokerages' online services experienced significant outages on Monday, frustrating investors trying to trade during a volatile market decline. The outages came on a day when Wall Street indexes plunged on U.S. recession fears, weak economic data and lackluster second-quarter earnings from tech giants.
According to outage tracking website Downdetector.com, most major brokerage firms experienced outages:
Downdetector tracks outages by aggregating status reports from multiple sources, including users.
The technical issues at Schwab and Fidelity were confirmed by the companies, but no specific details were given about the cause. Periods of extreme market volatility can sometimes overwhelm trading platforms and lead to technical glitches, raising questions about the brokers' ability to handle high volumes during critical trading periods.
Important trading day
Wall Street's reaction to the economic indicators was swift and fierce. Fears of a recession were exacerbated by weak economic data and disappointing earnings from major technology companies. Geopolitical tensions further dampened market sentiment, making investors nervous and causing many to dump risky assets such as stocks and cryptocurrencies.
As a result, the market lost over 2% in the first minutes of trading.
In addition to Schwab, Fidelity and Vanguard, Robinhood, E*TRADE and Interactive Brokers also struggled with technical problems.
Earlier in the day, Robinhood reported a pause in its overnight trading services, but later announced the resumption of those services. Robinhood allows its users to trade select stocks and exchange-traded funds around the clock, making it very popular among retail investors.
At 8:45 a.m. Pacific Time, Schwab was still showing users a warning message:
The recent outages underline the system's vulnerabilities, especially in times of high market stress.
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