One of the first signs of trouble arrived at 9:41 p.m. Eastern time on Thursday, when most of Wall Street was shut and traders were still enjoying the Thanksgiving holiday in the US.
“Due to technical issues,” CME Group Inc. said in a one-line email to clients, its futures and options “markets have been halted.”
The problem, it turned out, was the cooling system at a data-center complex in the suburban town of Aurora, Illinois, some 50 miles (80 kilometers) from Chicago, which serves as the main hub for trillions of dollars of derivatives traded each day. Inside, temperatures soared past 100F (38C) despite the frigid weather, according to people familiar with the matter.
At the time, the CME’s information indicated the outage at the facility — run by private-equity owned CyrusOne — would be brief, according to a person with direct knowledge of the situation. As a result, it opted against switching over to a backup facility near New York City.
But before long, the magnitude of that fateful decision would become painfully clear. Despite a flurry of emails from CME assuring clients the problem would be fixed in the “near term,” the malfunction persisted and brought down vast parts of the global financial system for hours. From Tokyo to London, and eventually New York, trading in everything from gold and oil to wagers on the direction of US interest rates came to an abrupt halt.
