MARKET NEWS

(Bloomberg) — Trading of futures and options on the Chicago Mercantile Exchange was halted by a data-center fault, causing hours of disruption to markets across equities, foreign exchange, bonds and commodities.

The malfunction was caused by cooling system problems at a data center in the Chicago area, according to facility operator CyrusOne. Engineering teams have restarted several chillers and deployed temporary cooling equipment, a spokesperson said, without giving a time for the resumption of normal operations.

The halt is already longer than a similar, hours-long outage due to a technical error back in 2019 and underscores the reach of CME Group Inc. (CME) and its Globex electronic trading platform. It triggered widespread frustration as market participants contemplated the prospect of a lost trading session.

Millions of contracts tracking the S&P 500 (ES=F), Dow Jones Industrial Average (YM=F) and Nasdaq 100 (NQ=F) trade every weekday virtually around the clock on the CME, one of the world’s largest derivatives exchanges.

“It’s a bit like flying dark,” said Thomas Helaine, head of equity sales at TP ICAP Europe in Paris. “When you’re trading cash equity like us, US futures give you an indication of where the market is going before the open. I can only imagine how complicated it must be for derivatives desks.”

The outage halted trading of US Treasury futures, while European and UK bond markets that trade on a different exchange were unaffected. EBS, a platform used in foreign exchange, was impacted, hurting price discovery in the market.

For some traders, the timing of the disruption on Friday could cause particular inconvenience if it lasts, due to the need to roll positions from one monthly contract to another.

“Traders sitting with a position are certainly quite angry,” said Gnanasekar Thiagarajan, head of trading and hedging strategies at Kaleesuwari Intercontinental.

Gold saw erratic moves in early London trading, with the gap between bids and offers about 20 times wider than normal. US crude oil and palm oil on the Bursa Malaysia exchange were also affected. In commodities markets, Friday is the expiry day for gasoline and diesel futures that can be settled with delivery of the actual physical fuel, adding a further potential complication.

The disruption created challenges for equity-derivatives desks. Options on the S&P 500 representing roughly $600 billion in notional value were set to expire on Friday, according to data compiled by Bloomberg. While those contracts trade on the CBOE market, traders use CME-listed futures to delta-hedge their positions.