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Trading in futures and options on the CME resumed on Friday following a fault at a data centre that disrupted global markets for more than 10 hours.
The outage at CME Group, the world’s largest derivatives exchange, began late on Thursday in the US and came as markets on Wall Street prepared to reopen after the Thanksgiving holiday. By early afternoon on Friday the company said all its markets had reopened.
Investors rely on CME futures to hedge their positions in markets ranging from Treasuries to stocks on the S&P 500, as well as pricing Wall Street indices at the market open.
CME blamed the halt in trading on a “cooling issue” at a data centre 35 miles from the CME’s headquarters in Chicago and operated by private equity-owned CyrusOne.
Trading on its main Globex platform restarted at 7.30am US Central Time. Its BrokerTec EU, BrokerTec US Actives and EBS currency markets reopened earlier on Friday.
S&P futures drifted higher after dealing resumed, rising 0.3 per cent. The S&P 500 index climbed by the same amount in morning trading.
The disruption had hit all of CME’s derivatives markets, which handled an average of 28.3mn contracts a day in the third quarter on futures tied to interest rates, Treasuries, energy and equities.
It was far longer than an outage in 2019 that disrupted global trading for three hours and underscored CME’s dominance of global derivatives markets.
“Today’s disruption shows how concentrated futures markets really are — there just aren’t many alternative venues for the main products,” said Thomas Texier, group head of clearing at Marex.
Even before the outage, global markets had been set for a quiet day following the Thanksgiving holiday, with no major economic data scheduled and US equity markets closing early.
Traders said volumes were light after markets reopened.
“It’s about the best day of the year for it to happen — it’s pretty quiet,” said the chief executive of a big hedge fund. “But a very long outage for a key market utility and not much communication with [investors]. Someone must have left early for their Thanksgiving dinner.”
Friday’s disruption came on the final trading day of the month, when many options contracts will expire and traders typically shift their positions into new contracts.
Investors said earlier on Friday that the blackout was making banks reluctant to trade in other markets such as bonds, swaps and currencies on Friday morning, pushing up transaction costs.
CME sold the 450,000 sq ft data centre in the suburbs outside Chicago to CyrusOne in 2016, in a $130mn sale and leaseback deal.
Unlike the giant new data centre projects that big tech groups are investing hundreds of billions of dollars in for artificial intelligence, the 109 megawatt facility is a more traditional data centre that relies on air conditioning to keep its giant ranks of servers at a stable temperature.
Based in Dallas, Texas, CyrusOne operates more than 55 data centres across the US, Europe and Asia. The company is owned by US private equity groups KKR and Global Infrastructure Partners.
CyrusOne said one of the facilities “experienced a chiller plant failure affecting multiple cooling units” on Thursday. The company’s engineers restarted some units and “deployed temporary cooling equipment to supplement our permanent systems”, it added.
Additional reporting by Costas Mourselas, Tim Bradshaw and Ian Smith
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