Technology-related outages hit online trading platforms on Monday morning causing a rough start for US brokerage firms Charles Schwab, Vanguard, Fidelity, and more, causing panic in an already precarious market.
It was a rough start on Wall Street as customers of several major investment firms began reporting issues with logging into their brokerages' websites and apps soon after the 9:30 a.m. ET opening bell.
Global financial services company Charles Schwab – one of the first to acknowledge the blackouts at about 10:00 a.m. ET – apologized to customers on X about the now-resolved outage.
“Due to a technical issue, some clients may have difficulty logging in to Schwab platforms,” it said, warning that hold times “may be longer than usual."
“Please accept our apologies as our teams work to resolve the issue as quickly as possible,” the firm said.
Due to a technical issue, some clients may have difficulty logging in to Schwab platforms.
undefined Charles Schwab Corp (@CharlesSchwab) August 5, 2024
Please accept our apologies as our teams work to resolve the issue as quickly as possible.
Hold times may be longer than usual.
At about 1:00 p.m. ET, the Texas-based wealth management company announced the “technical issue experienced by some clients has been resolved. We apologize for the inconvenience.”
Charles Schwab – nor any of the other brokerages affected – have revealed what caused the disruption.
Web outage tracking site Downdetector(dot)com reported a shark spike of about 14,500 Charles Schwab users having issues with its website and mobile and online brokerage services.
Downdetector showed another 5,000 plus customers combined reporting similar outages at Fidelity Investments, and with Vanguard services, also within the same time mid-morning timeframe.
Online trading platforms Robinhood Markets and E*TRADE also reported mobile and app issues on Monday, preventing customers from performing any transactions.
Investors vow to jump ship
Weak economic data, Mid-East tensions, and fears of a US recession have been swirling since the weekend leading European investors to dump technology stocks and other risky assets in mass on Monday, only adding to the frustration for US investors unable to conduct trading while Wall Street indexes were plummeting.
The Cboe volatility index, Wall Street's fear gauge, was at a two-year high after hitting its highest since March 2020 earlier in the session, Reuters reported, pointing out that bouts of extreme market volatility can sometimes trigger such technical problems.
Many investors took to social media to vent anger at the brokerages over the situation, with some even calling the simultaneous outages suspicious.
“This isn't the first time this has happened to their platforms in sell-off scenarios like this...this is clearly coordinated by @Fidelity @CharlesSchwab and the others,” wrote one user.
“Cmon...what are the odds they all go down at once? Bigger question is who is coordinating this,” they said.
The Kobeissi Letter, an industry leader in commentary on global markets, reported on X that many clients were declaring “they will be leaving Charles Schwab after today's outage.”
“It took 2+ hours for most users to regain access to their trading accounts. In that time, the S&P 500 added ~2%, or $900+ billion of market cap,” The Kobeissi Letter posted.
BREAKING: Many users on X are reporting that they will be leaving Charles Schwab after today's outage.
undefined The Kobeissi Letter (@KobeissiLetter) August 5, 2024
It took 2+ hours for most users to regain access to their trading accounts.
In that time, the S&P 500 added ~2%, or $900+ billion of market cap.
Will you be leaving Schwab? pic.twitter.com/rDP2kDWhxR
By Monday afternoon, Fidelity and Vanguard had announced the technology problems were resolved. “We apologize for any inconvenience,” Fidelity responded to many of its followers on X.
In addition, Robinhood Markets also said it had resumed trading after a pause.
The Securities and Exchange Commission (SEC) told Reuters it was tracking the developments. "We are actively monitoring for the orderly functioning of markets," the SEC spokesperson said.
It’s now the fourth separate tech-related incident to disrupt stock exchanges in the past six months. Last Wednesday, Switzerland’s SIX stock exchange suffered two separate outages caused by tech issues also halting trading for hours.
In June, the New York Stock Exchange (NYSE) suffered a technical problem that caused massive swings in shares of major companies, including real estate giant Berkshire Hathaway and Barrick Gold, the global mining company.
And in early spring, technical glitches halted early morning trading in two separate incidents one affecting the Nasdaq Stock Market, the other, the London Stock Exchange Group (LSEG).
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