Fidelity Investments and Vanguard, leading online brokers, experienced major service outages today. Sharp declines in cryptocurrency and stock markets followed pessimistic forecasts about the US economy. According to Downdetector data, over 2,800 Vanguard customers reported service disruptions in the morning, while around 4,000 Fidelity users faced similar issues.
Sharp Sell-Offs in Global Markets
Robinhood suspended its 24-hour trading services due to “extreme volatility” in global markets. Global markets experienced a major crash as the likelihood of a US recession increased. The cryptocurrency market fell below $2 trillion, losing nearly 8% in the last 24 hours. This sharp decline was also felt in broader markets, with the S&P 500 losing 2.66% and the Nasdaq dropping 3.12%.
Analysts noted that developments in the US and Japan combined to create fears of a global recession, triggering major sell-offs in both traditional and cryptocurrency markets. British financial services firm AJ Bell attributed the decline to two main factors: weak second-quarter earnings in the US and inadequate economic data from the US Bureau of Labor Statistics.
Recession Concerns and Fed’s Actions
Goldman Sachs economists raised the likelihood of a US recession in the next 12 months from 15% to 25%. This increase followed weak second-quarter earnings and inadequate economic data from the US Bureau of Labor Statistics. Many investors believe the Federal Reserve missed opportunities to lower interest rates this year and failed to achieve a soft landing.
It remains unclear whether withdrawal requests from investors caused these service outages. Fidelity Investments and Vanguard have yet to comment. However, this market volatility has shaken investor confidence, raising concerns about potential future outages.
Markets may continue to fluctuate based on how investors react to future economic uncertainties. The future shape of cryptocurrency and stock markets remains a significant question. As investors continue to seek safe havens, market volatility persists. BTC was trading at $53,456 at the time of writing.
