Microsoft System Outage Disrupts Markets, Traders Forced to Communicate via Phone

As the market turbulence approached its climax, Rita Elkaz's Microsoft Outlook suddenly crashed. With AI stocks and bonds experiencing severe fluctuations, traders were already on edge, and the UBS Group's Executive Sales Director for the Australia-New Zealand region had no choice but to switch to phone and other channels for communication. {#quote_UBS}

"It's a complete mess, I can't believe the issue hasn't been fixed yet," Elkaz said from Sydney. "This means we have to put in more effort to double-check and ensure that trade confirmations and other documents are accurate."

Microsoft faced one of its most severe service outages in recent years, with many professionals sharing Elkaz's experience. Hours after the outage began, the tech giant was still working to repair some core software, with Outlook, Teams, and Copilot all rendered unusable. Efficient communication was hindered, trading desk operations were disrupted, corporate disclosures were delayed, and Japan's Ministry of Finance's email system was also affected.

Traders in Singapore reported that some banks were unable to complete financing transactions. Several Indian brokerage firms issued service risk warnings, with India's IIFL Capital Services informing clients that responses to email inquiries might be delayed.

Australia's main exchange operator, ASX Limited, informed clients that it had noted issues with some Microsoft 365 services, including email, but that the exchange's own operations were running normally. American truck and bus manufacturer Workhorse Group announced a delay in its earnings report release.

Japan's government shared IT platform also experienced issues, with the Ministry of Finance stating that it was unable to receive emails due to the outage.

Calvin Yang, a fund manager at hedge fund Blue Horizon Advisors, was also affected. He was unable to check emails, had difficulty retrieving brokerage reports, and could not log into some trading platforms that required email verification.

"Outlook is the lifeblood of modern financial operations," Yang said. "The entire operational system of global finance, from front to back office, is being dragged down, especially with Nvidia's stock plummeting this week and the interest rate market experiencing severe volatility."

Traders at CMC Markets were forced to revert to "old-fashioned" methods of trading.

"Everyone has gone back to communicating via phone, and our WhatsApp messages are much busier than usual," said CMC Markets Singapore sales trader Xu Junyan. "What used to take a second to resolve via email now takes several minutes over the phone to clarify."

Ryotaro Kimura, a senior bond strategist at BNP Paribas Asset Management in Tokyo, also noted that while trading itself was not significantly affected, "there is a large backlog of trade confirmations, causing issues for back-office settlements. The trading desk is relying on phones and faxes to complete trades." {#quote_BNPQY}

On the outage monitoring site Downdetector, reports of user issues with various Microsoft services approached 200,000, marking one of the most severe outages in Microsoft's history. Such interruptions rarely last more than a few hours. In after-hours trading, Microsoft's stock fell by 0.4%.

Initially, Microsoft struggled to identify the problem and test repair solutions, but subsequent updates indicated that "work to restart the affected infrastructure has made positive progress."

Matthew Haupt, a fund manager at Wilson Asset Management, stated that his small-cap team reported a decline in trading volume for some stocks due to the outage.

Kenneth Koh, head of private wealth management at brokerage UOB Kay Hian, was on a business trip in Malaysia and found it difficult to access market information, making it hard to provide investment advice to private clients, especially given the already volatile market conditions this week.

"It's incredibly frustrating," Koh said, relying on an unstable phone signal to communicate with clients. "If the outage lasts more than 24 hours, the situation will enter a critical zone."