Biden Exits 2024 Race; Asian Stocks Fall and Tech Outage Disrupts Global Markets

Asian stock markets fell on Monday after President Joe Biden announced he would not run in the 2024 presidential race. This came after losses on Wall Street last Friday, as businesses around the world dealt with problems caused by a big tech outage.

Global Market Reactions

• Japan: The Nikkei 225 index dropped 1.3%, hitting 39,556.85.

• Hong Kong: The Hang Seng index went up 0.8% to 17,548.33.

• China: The Shanghai Composite index fell 0.7% to 2,961.41 after the People's Bank of China cut its one-year loan prime rate (LPR) to 3.35% from 3.45%. The five-year LPR, used for mortgages, was also cut to 3.85% from 3.95%. These changes aim to boost the slowing economy and address the property market issues.

• Australia: The S&P/ASX 200 dropped 0.6% to 7,924.40.

• South Korea: The Kospi index fell 1.4% to 2,756.62.

US Market Recap

On Friday, the S&P 500 dropped 0.7% to 5,505.00, marking its first losing week in three and its worst since April. The Dow Jones Industrial Average fell 0.9% to 40,287.53, while the Nasdaq composite declined 0.8% to 17,726.94.

Tech Outage and Its Impact

A major tech outage disrupted flights, banks, and doctor appointments worldwide on Friday. Cybersecurity firm CrowdStrike said the issue was due to a faulty update in Microsoft Windows and not a cyberattack. CrowdStrike's stock dropped 11.1%, while Microsoft's shares decreased by 0.8%.

Expert Insight

Cybersecurity analyst Richard Stiennon called the incident a big mistake by CrowdStrike but said it doesn't mean there's a bigger problem with the company or the industry. He believes the markets and customers will eventually forgive them.

Cybersecurity Stock Movements

• CrowdStrike: Despite a slight recovery during the day, it still had its worst performance since 2022.

• Rival Firms: Stocks of other cybersecurity companies went up, with SentinelOne rising by 7.8% and Palo Alto Networks by 2.2%.

Airline Industry Effects

The outage caused long delays at airports worldwide. While U.S. airline stocks initially fell, they quickly bounced back. United Airlines gained 3.3%, Delta Air Lines increased by 1.2%, and American Airlines Group saw a small drop of 0.4%.

Other Market Movements

• Bond Market: The yield on the 10-year Treasury note rose to 4.23% from 4.20%.

• Oil Prices: U.S. benchmark crude oil increased by 34 cents to $78.98 per barrel. Brent crude rose by 41 cents to $83.04 per barrel.

• Currency Exchange: The U.S. dollar strengthened to 157.51 Japanese yen from 157.42 yen. The euro edged up to $1.0892 from $1.0886.

Also Read: Stocks Drop as Microsoft Outage Hit Major Companies Operations: Market Update